Bitcoin price continues to plummet, what is happening?

Bitcoin dropped nearly 10% in just a few hours, causing red to cover the market and many other currencies losing more than 20% of their value.

Cryptocurrencies are entering "bear market" territory - bearish price declines of 20% or more.

Bitcoin - the largest cryptocurrency by market capitalization - dropped nearly 10% as of this afternoon, reaching the threshold of 57,000 USD. Compared to its all-time high of over $73,000 reached in mid-March, the currency has lost more than 20% of its value.

According to analysts, sell-off pressure has skyrocketed in the cryptocurrency market because the Hong Kong spot exchange-traded fund (ETF) failed to attract interest and investors were concerned about interest rates.

The CoinDesk 20 (CD20) market index fell even more during the same period, as other cryptocurrencies such as Ethereum (ETH), Solana recorded a 9-11% decline. Currencies with a capitalization of several hundred million USD lost 15-25% in just a few hours.

According to Coinglass, nearly $100 million in futures positions on exchanges were liquidated in the past hour. In 24 hours, nearly 500 million USD was liquidated.

Futures contract trading allows investors to use large-scale leverage, up to 50-100 times the initial capital. Liquidation takes place when the loss of trading orders exceeds the initial deposit amount.

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