The cryptocurrency market has been experiencing a significant downturn in the past 24 hours, resulting in massive liquidations of crypto assets. According to on-chain data, over $200 million worth of leveraged crypto positions have been liquidated in just one hour, bringing the total figure in the last 24 hours to $885 million. This sharp decline marks the highest derivative exit this month.
As a result, there have been diverse reactions from market participants, with some bulls and bears panicking over the sudden sell-off. The crypto chart is currently showing a red zone, but some users see this as a buying opportunity, using the catchphrase “buy the dip.” These liquidations occurred as bulls predicted an increase in the market leader Bitcoin (BTC) due to inflows and the upcoming halving event.
However, this sudden trend reversal can be attributed to macroeconomic factors and geopolitical tensions in the Middle East. News of a potential Iran attack on Northern Israel has caused further tensions in the region, impacting both traditional and crypto assets. While traditional assets like gold saw a surge, the crypto market experienced liquidations.
Despite the current trend, crypto bulls believe that this period of liquidation could result in more buying opportunities in the market. Pro-crypto commentator @ZachDWest highlighted that these liquidations are temporary due to the high volatility in the market.
He stated, “Volatility is temporary and shouldn’t shake you out. Years from now, the value of #Bitcoin sats will slowly tick upwards, ensuring every sat you save will be worth more as you age. Bitcoin is the truest stablecoin. Zoom out.”
The wider cryptocurrency market has seen a 7% decline in the last 24 hours, with Bitcoin plunging 5.21%, erasing its weekly gains. Altcoins have also been hit hard, with some assets losing as much as 17% in value. Ethereum (ETH), Solana (SOL), and Ripple (XRP) have recorded losses of 8.65%, 14.49%, and 12.4%, respectively. Cardano (ADA) and Avalanche (AVAX) have both experienced a significant drop of 17%.
In other news, there is speculation about whether El Salvador will change its Bitcoin laws in order to secure a $1.4 billion loan from the IMF. This potential change could have a significant impact on the crypto market.
