The cryptocurrency market experiences a day of strong declines this Friday, with Bitcoin giving up 5% and threatening to pierce the US$105,000 barrier, according to Binance. Ethereum did not perform better, falling up to 7% and dangerously approaching US$3,700.
The debacle spread to altcoins. Binance Coin recorded the worst performance with a drop of 8.7%, followed by Cardano (-8.7%), Dogecoin (-8.5%), Solana (-7.4%), XRP (-6.7%)evidencing a systematic abandonment of the lower capitalization asset segment.
Mass liquidations
The pressures on the market led to a cascade of liquidations that totaled almost US$1.2 billion in 24 hours, according to data from CoinGlass.
79% of these forced closures corresponded to long positionsreflecting the bets of leveraged traders who were unable to meet margin requirements when prices turned against them.
In the traditional instruments segment, Bitcoin spot exchange-traded funds suffered their worst monthly dayrecording net outflows of US$530.9 million. Ethereum ETFs experienced less severe capital outflows of $56.9 million.
The aggregate impact was overwhelming: the total capitalization of the crypto market contracted by 6%now standing at around US$3.5 trillion, a loss of US$800,000 million from the US$4.3 billion registered at the beginning of the month.
Signs of accumulation of short positions
The behavior of open interest in Bitcoin is especially relevant. During the last 24 hours, This metric increased 2.85% to reach US$73,000 million.
Analysts warn that, When open interest rises simultaneously with price declines, it typically indicates that traders are opening new short positions in anticipation of further declines..
For his part, the Crypto Fear and Greed Index was in clearly bearish territory, hovering around 30 points, a drop of more than 20 points compared to the reading from a week ago.
Macroeconomic uncertainty and demand for refuge
The deterioration in cryptoassets is inserted in a context of growing tension on the international trade front. China accused the United States of generate unnecessary “panic”while concerns persist about the stability of the regional banking system on Wall Street.
Given this panorama, Investors have accelerated their migration towards safe haven assets. Gold continues to break all-time highs, benefiting from the risk aversion that prevails in global financial markets.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
