Cryptocurrency markets experienced significant volatility over the past 24 hours, with major digital assets plunging as much as 20%. Early trading in Asia saw a wave of selling triggered by movements from a wallet associated with the Mt. Gox exchange, unsettling traders and pushing the overall market down by an average of 10%.
Bitcoin (BTC) briefly dipped below $54,000, marking an 8% decline and wiping out gains accumulated since February before partially recovering. Ether (ETH) dropped over 10%, while Solana‘s SOL and Cardano‘s ADA both fell 8%. Dogecoin (DOGE) saw a steep decline of nearly 18%.
According to data from Coinalyze, the market turbulence resulted in more than $580 million in liquidations linked to long positions, marking one of the largest such events this year. Bullish bets on bitcoin and ether alone incurred losses exceeding $380 million.
The largest individual liquidation occurred on Binance, where an Ethereum trade worth $18.4 million was forcibly closed. Meanwhile, open interest in futures contracts dropped 12%, indicating a significant outflow of funds from the market.
Liquidations occur when traders are unable to meet margin requirements for leveraged positions, leading exchanges to close positions to mitigate further losses.
The volatility coincided with movements by Mt. Gox, which transferred substantial amounts of bitcoin to a new wallet. This activity is seen as preparation for the distribution of assets stolen in a 2014 hack, scheduled to begin this month after multiple delays. The reimbursements, expected to be in bitcoin and bitcoin cash, could potentially increase selling pressure in both markets.
Commenting on the market outlook, trading firm QCP Capital projected a cautious third quarter for BTC, citing uncertainty surrounding the Mt. Gox asset release: “We anticipate a subdued Q3 for BTC as the market remains uncertain around the supply from the Mt. Gox release,” the firm stated in a Thursday broadcast on Telegram.
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