A billion and a half dollars were liquidated after the fall in the price of Bitcoin. Will the war lead to a greater decline?
The digital currencies are yet to recover from the severe declines experienced during the Black Friday and Saturday sessions, particularly impacting cryptocurrency traders, especially futures traders.
At the moment, Bitcoin is trading at $64,236 per coin at 13:15 Riyadh time, showing a 0.6% increase in today’s trading after a loss of nearly 10% since April 11. Bitcoin reached its lowest level since hitting a peak of $73,740 on March 14, dropping to $61,065.5 yesterday, April 13.
A massive liquidation occurred, the most severe in six months, causing many futures traders to liquidate their positions in cryptocurrencies like Ethereum, which dropped below $2,900 before rebounding to $3,035.46, Solana, Dogecoin, and the Baby PEPE coin.
As Bitcoin and alternative currencies decline, liquidation processes for many digital currency bulls’ portfolios begin. With Bitcoin dropping below $65,214, down 7% weekly, liquidation and plummeting intensify, causing widespread, violent declines across major and minor currencies. Currencies like Solana and Dogecoin dropped by over 18% and 19%, respectively.
Liquidations typically trigger sharp declines in cryptocurrency prices. According to CoinGlass data, nearly $775.40 million was liquidated from long positions in derivative markets yesterday. Short positions also weren’t spared, with about $89.89 million liquidated.
CoinGlass assessed the total liquidations on Friday and Saturday at $1.5 billion, marking the most violent liquidations in the cryptocurrency market in the last six months.
The ongoing tensions between Israel and Iran, sparked by Iranian attacks in response to the bombing of the Iranian consulate in Damascus, have also impacted the market. However, the Israeli stock market opened on Monday with a 0.3% increase despite the Iranian attacks, indicating a limited market reaction to these developments.
If conflicts escalate in the Middle East between Iran and Israel, it will test the idea that Bitcoin and other digital currencies provide refuge in times of conflict, a sentiment shared by many asset class supporters. When Russia annexed Ukraine at the beginning of 2022, digital currencies experienced market collapses that persisted until the end of that year.
The current market capitalization of cryptocurrencies stands at $2.31 trillion, with Bitcoin trading at $64,554 at 13:45 Riyadh time. Ethereum is trading at $3,059, down 6.59%, but has managed to recover from the $2,900 low it reached on Saturday. Solana is at $143.5, and Dogecoin is at $0.156823.
Bitcoin’s dominance in the cryptocurrency market has dropped to 34.8%, while Ethereum accounts for 19.42% and Solana for 5.84%.
