In a startling turn of events over the past 24 hours, investors in digital assets have suffered losses of more than $1bn, as the market for digital assets experiences one of the most major selloffs this year, sending the price of bitcoin to its lowest point in three months.
Up to 176,374 traders have been liquidated in this brief period, causing a loss of about $1.04 billion.
According to CoinGlass analytics, the abrupt and precipitous exit has wiped out almost $821 million in long positions, which is a sign that traders were betting on an increase in market activity.
The most significant losses are being experienced by bitcoin traders, with long-term liquidations totaling $472 million, followed by ether with $302 million.
The collapse of the cryptocurrency market coincides with the flight from riskier international assets as investors look for long-term investments with higher yields.
Reports that Elon Musk’s SpaceX may have been liquidating its Bitcoin holdings have added to the uncertainty surrounding these market swings.
There has been talk about SpaceX’s alleged Bitcoin sales, which have not yet been verified. Corresponding to this, there are theories connecting China Evergreen’s bankruptcy to the market collapse.
Notably, a Wall Street Journal article makes it clear that SpaceX is simply changing the value of its Bitcoin assets.
With a 10% fall, Bitcoin appears to be headed for its biggest weekly decline in three months after bottoming out at $25,314.
This decrease is due to the global bond yields rising, which has lowered the appeal of alternative assets like digital tokens, from their worth of $28,947 the day before.
A significant milestone was reached when Bitcoin’s market value fell below $500 billion for the first time since June 16 and hit its lowest level since June 20.
Since the middle of July, the price of cryptocurrencies has been falling, corresponding to the rise in the US Dollar Index during that time.
Notably, a Wall Street Journal article makes it clear that SpaceX is simply changing the value of its Bitcoin assets.
It is possible that the decrease on August 17 can be attributed to previous downturns in the bitcoin market caused by expectations of rising interest rates.
The ongoing rise in interest rates around the world, particularly in the United States, where the 30-year Treasury note climbed to 4.42%, marking its highest level since 2011, is one factor impacting the market’s decline.
The 10-year yield, which now stands at 4.32%, has increased by one basis point from its 15-year high.
The Federal rate is expected to stay within the current range of 5.25% to 5.50% until that point, according to the forward rate of the federal funds rate, which predicts the first rate drop sometime between May and June 2024.
Despite these difficulties, market indicators show that the crypto market is almost oversold; the daily Relative Strength Index is barely above the normal level at 34 which suggests that there is a good possibility the market will stabilize or recover during the coming days.
According to prominent investment research firm Fundstrat, if the current batch of Bitcoin spot exchange-traded funds in the United States is approved, the price of Bitcoin may potentially approach $150,000 by the end of 2024.
