Amid the latest drop in digital asset prices, the cryptocurrency market is once again facing a wave of liquidations on centralized exchanges. An analysis by CCData notes that the situation is exacerbated by a drop in aggregate liquidity for Bitcoin (BTC) and Ethereum (ETH).
The figure, which reached $1.23 billion on July 29, fell more than 50% to $612.44 million on August 5. This was a new low since October 2023. This significant decline is due to large sell orders and general volatility, making the current situation in the cryptocurrency markets especially tense.
An analysis of the causes of the crisis points to a combination of unfavorable macroeconomic factors, such as changes in the JPY/USD pair, geopolitical tensions in the Middle East, and the impact of major players liquidating their assets. As a result of these events, the Bitcoin (BTC) rate briefly fell from $61,000 to around $48,200, which triggered a cascade of liquidations in the market.
There has been a significant decline in open interest (OI) over the past 24 hours, falling by 17.35% from around $85 billion to $70.2 billion. Exchanges such as Binance, Bybit, and Bitget have seen OI decline by 19.18%, 20.49%, and 21.58%, respectively. This data highlights the significant accumulation of open interest and similar trading behavior across the various exchanges.
Given the events that have taken place, the key question is whether cryptocurrency markets will be able to stabilize in the near future.
Reduced liquidity and market depth make digital currencies more vulnerable to sharp price fluctuations, requiring investors to exercise increased caution. Long-term prospects depend on the ability to adapt to new macroeconomic conditions and restore confidence among participants. The current situation in crypto markets requires close attention and analysis from all participants, including investors, traders, and regulators.