September 19, 2024 has gone down in the history of the cryptocurrency market as a day full of turmoil, with the "shock" coming from the FED's decision to sharply lower interest rates. Amid the fierce waves of the market, a series of transaction liquidation orders were triggered, creating a colorful but equally brutal picture.
The Liquidation Overview
According to data from the liquidation map, Bitcoin (BTC) continues to be the undisputed king in terms of liquidation volume, with a total value of up to $75.11 million. Ethereum (ETH) comes in second with $35.03 million, showing the significant influence of these two leading cryptocurrencies.
Other altcoins, grouped under the “Other” group, also saw significant liquidations, amounting to $18.58 million. This shows that the wave of liquidations did not leave any corner of the market untouched.
Detailed analysis
Liquidation Time: Liquidation occurred across all timeframes, from 1 hour, 4 hours, 12 hours to 24 hours. This shows that the strong market volatility affected both short-term and long-term traders.
Long vs Short: The data shows that liquidation of long positions accounts for a larger proportion than short positions, especially in the 24-hour time frame. This suggests that many investors had placed long-term bullish bets but were caught off guard by the sharp volatility following the Fed decision.
Liquidation Size: The largest liquidation order recorded on Bybit was worth $8.93 million. This figure shows the huge risk that traders face when using high leverage.
Causes of the liquidation wave
The FED's interest rate "shock" has created a domino effect on the crypto market.
Sharp price swings: The FED's surprise decision caused the price of Bitcoin and many other altcoins to fluctuate sharply, triggering a series of stop-loss orders and liquidations.
Panic: The sharp price fluctuations have created panic in the market, causing many investors to sell off assets to cut losses, further increasing selling pressure.
High Leverage: Many traders using high leverage have been liquidated when prices moved against their predictions.
Lessons learned
This wave of liquidations is a stark reminder of how volatile the cryptocurrency market is.
Risk Management: Investors need to have a clear risk management strategy, including using stop-losses, diversifying their portfolios and not using too much leverage.
Stay informed: It is necessary to closely monitor market information, especially important macroeconomic events such as the FED's decision, to be able to make wise investment decisions.
Stable mentality: The cryptocurrency market is volatile, investors need to keep a stable mentality, should not panic sell when the market drops.
Conclude
The wave of liquidations following the FED interest rate “shock” is a clear demonstration of the volatile and high-risk nature of the crypto market. However, this is also an opportunity for investors to learn valuable lessons, so that they can participate in the market more effectively and safely.
