The cryptocurrency market plummeted today, and do you want to know the real reason?
Cryptocurrency market capitalization fell about 4% in the past 24 hours during early European trading, hovering around $2.42 trillion on Thursday. Bitcoin ( BTC ) and Ethereum prices led the pullback across altcoins, triggering significant liquidations.
The latest market data shows Ethereum prices down around 8%, trading at around $3,174. Bitcoin price continues its recent pullback, retesting the 50-day moving average (MA) around $64,000. As a result, nearly $300 million was liquidated in the crypto derivatives market, most of which involved long traders.
3 main reasons why cryptocurrencies are falling today:
1. The cash outflow of spot Ethereum US ETF is significant. The US spot Ethereum ETF has a net cash outflow of approximately US$133 million, led by Grayscale's ETHE. The stock still has nearly US$8 billion to sell. The Ethereum ETF has performed poorly over the past two days, adding to the pessimism in the crypto market.
2. Large-scale liquidation in the U.S. stock market. In the past 24 hours, the market value of the U.S. stock market has evaporated by approximately US$1.1 trillion, which is almost equivalent to the market value of the entire Bitcoin. Although less relevant to the cryptocurrency industry, the high-profile stock market liquidation sent shockwaves throughout global markets. The upcoming FOMC statement will further bring further uncertainty to the mid-term market.
3. Mt. Gox panic. In the past 24 hours, Bitcoin’s fear and greed index fell to 68%, indicating that people’s fear of cryptocurrency capitulation has increased. Fears of further cryptocurrency capitulation have been fueled in part by Mt. Gox's repayment to creditors, which deposited more than $2 billion into the Bitstamp exchange in the past 24 hours.
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