The cryptocurrency market is experiencing a sharp decline today, January 7, 2024, with Bitcoin (BTC) leading the drop. This sell-off has triggered massive liquidations, wiping out hundreds of millions of dollars in a matter of hours.
$293 Million Liquidated in Hours
Bitcoin, the largest cryptocurrency, has fallen by over 5%, dropping from $102,060 to $96,865 in just a few hours. According to data from Coinglass, this plunge caused $293 million in liquidations, with more than 90% of these losses coming from long positions. Over $266 million worth of longs were wiped out, compared to $25.7 million in short liquidations.
Other major cryptocurrencies aren’t far behind. Ethereum (ETH) is down 7%, Solana (SOL) 6.2%, Dogecoin (DOGE) 8.5%, and Cardano (ADA) 8%. Surprisingly, XRP is moving against the tide, gaining 1.5% despite the broader sell-off.
Why the Sudden Crash?
The downturn appears to be tied to a sharp rise in U.S. Treasury yields, which has rattled both crypto and traditional financial markets. A report from the Institute for Supply Management (ISM) revealed stronger-than-expected economic data, with the December Purchasing Managers’ Index (PMI) rising to 54.1 from November’s 52.1.
While this might sound like good news for the economy, it’s fueling fears of higher inflation and more interest rate hikes by the Federal Reserve. These concerns are pushing U.S. stock markets lower as well. MicroStrategy (MSTR), the largest corporate holder of Bitcoin, saw its stock plunge by over 10% today.
What’s Next?
The combination of rising yields and inflation worries has shaken investor confidence, and the market remains volatile. For now, the crypto market appears caught in a broader financial storm, leaving investors bracing for more turbulence in the days ahead.
