Crypto market experienced a downturn as $312 million liquidated in 24 hours.
High leverage and volatility caused major liquidations.
Geopolitical tensions impacted market sentiment and prices.
The crypto market has experienced a significant downturn, with $312 million liquidated in the past 24 hours. This massive selloff has left traders and investors reeling. But what is behind this sudden market crash?
https://twitter.com/WatcherGuru/status/1819053280988668090 High Leverage and Volatility
One major reason for the massive liquidations is the high leverage used by traders. Leverage allows traders to borrow funds to increase their positions, but it also amplifies risks.
When the market moves against these leveraged positions, it can trigger a cascade of liquidations. In the past 24 hours, both long and short positions have been affected, with $210.94 million in long positions and $95.58 million in short positions being forced to close¹.
The high degree of leverage in the market signals heightened volatility and risk. Bitcoin, for instance, reached a new all-time high above $73,000, only to see a significant amount of leverage flushed out on exchanges like Binance and OKX. This volatility has been a key factor in the recent liquidations.
Geopolitical Tensions and Market Sentiment
Geopolitical tensions have also played a significant role in the recent market downturn. Bitcoin's price dropped by 5.2% after being rejected at the $70,000 price level, largely due to escalating conflicts in the Middle East.
This pullback affected major altcoins as well, with Solana (SOL) dropping by 10% in the same period. The market sentiment has been heavily influenced by these geopolitical events.
Traders have been quick to react to news, leading to rapid price movements and increased liquidations. The rejection at key price levels and the ongoing geopolitical tensions have created an environment of uncertainty, further contributing to the market's instability.
The crypto market's recipient bloodbath, resulting in $312 million in liquidations, can be attributed to high leverage and geopolitical tensions. Following this development, traders should manage risks and stay informed about market developments.
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