Unforeseen Bitcoin Plunge to Under $118K Triggers Massive Liquidation Struggles Reaching Nearly $1B
Bitcoin Takes a Dip Amidst Uncertainty and Selling Pressure
Bitcoin, the world's largest cryptocurrency, reached a new all-time high of $124,500 just hours ago before experiencing a sudden drop. The digital asset is currently hovering around $121,000, still $5,000 away from the peak it charted earlier today.
The decline in Bitcoin's price has been accompanied by a similar trend in altcoins such as Ethereum, XRP, Solana, Dogecoin, and Cardano, which have experienced declines of 2-3% in the past hour. This drop has led to a total value of wrecked positions due to altcoin declines surging toward $1 billion.
The sudden drop in Bitcoin's price, despite bullish news like US-Russia peace talks and strong wholesale inflation data, was primarily caused by mounting uncertainty around Federal Reserve monetary policy. Anticipations of Federal Reserve Chair Jerome Powell's speech at the Jackson Hole Economic Symposium have created significant macroeconomic headwinds and selling pressure. This uncertainty led to more than $500 million in long liquidations, exacerbating the price decline from record highs.
Additional factors contributing to the decline include profit-taking by long-term holders, a technical breakdown on intraday charts, speculation and confusion around US Treasury statements about Bitcoin purchases, and some institutional players selling Bitcoin. A large inflow of realized gains earlier in August triggered a price drop, signaling fragility in bullish sentiment.
Despite the short-term price correction, some corporate treasuries continue to accumulate Bitcoin, reflecting longer-term confidence. For instance, Japan’s Metaplanet has been accumulating Bitcoin.
In the past hours, liquidations have reached close to $460 million, and in the past day, more than 207,000 traders have been wrecked. Liquidations have skyrocketed to over $930 million on a daily basis.
[1] Federal Reserve Uncertainty Drives Bitcoin Price Drop [2] US Treasury Statements Confuse Bitcoin Investors [3] Institutional Players Sell Bitcoin, Adding to Market Weakness [4] Profit-taking by Long-term Holders and Technical Breakdown Increase Bearish Pressure [5] Large Inflow of Realized Gains Triggers Price Drop, Signaling Fragility in Bullish Sentiment
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