Crypto Crashes: Liquidations Surpass $1,1 Billion!

The month of October, which was dubbed as “Uptober” by many, has not delivered the expected gains Bitcoin and other leading crypto assets. With the start of November, the market is once again facing a negative outlook, with most major crypto assets having fallen significantly in value. On Monday morning, Bitcoin was down 4%, while many altcoins suffered even greater losses. Over the past 24 hours, liquidations have reached approximately $1,16 billion, a sign of the intensity the market is currently facing.

The vast majority of liquidations, approximately $1,08 billion, involve large long positions (bets that an asset's price will rise). Bitcoin and Ethereum are the biggest losers, with approximately $298 million and $273 million in liquidations, respectively. These figures clearly demonstrate that not only are prices under pressure, but market confidence is also faltering.

Market developments and price movements

Bitcoin's price has fallen to $105.699, a low last seen on October 17. Ethereum has taken an even harder hit, down nearly 7% and currently trading at $3.583, its lowest level in nearly three months. Other major altcoins such as XRP, BNB, Solana and Dogecoin are suffering from current market conditions, with losses of around 9% on a daily basis.

It's noteworthy that while the crypto market is under pressure, indices like the Nasdaq and S&P 500 remain relatively stable. This raises questions about the causes of the recent crypto declines, as no clear external factors seem to explain the losses.

Maartunn, a pseudonymous analyst at CryptoQuant, identifies several possible reasons for the recent losses. He points to selling pressure from US spot Bitcoin traders and identifies "signs of vulnerability" in the Ethereum charts. Both Bitcoin and Ethereum have recently been retesting support levels, a phenomenon that typically occurs during bearish market phases. During strong bullish periods, it's common for these support levels to be infrequently retested; this is generally a negative sign in these situations.

Maartunn also noted that Coinbase's premium, the difference between prices on this exchange and other trading platforms, could also have had an impact. During the weekend, when trading activity often slows, the premium could become negative and increase price pressure. This raises questions about the influence of US investors on price movements, similar to trends we saw last month.

The recent price declines have also been partly attributed to comments from U.S. Treasury Secretary Scott Bessent. He suggested that high interest rates may have pushed parts of the economy into recession, prompting crypto investors to exercise caution and speculate about future volatility ahead of the upcoming employment report.

Frequently Asked Questions

What are the main reasons for the recent price drops in the crypto market?
The recent declines are primarily driven by liquidations of long positions, selling pressure from US traders, and signs of vulnerability in the charts of Bitcoin and Ethereum. Market volatility has also been influenced by broader economic concerns, particularly those related to high interest rates.

What does this mean for the comparative performance of crypto and traditional markets?
The discrepancy between the performance of the crypto market and traditional stock markets like the Nasdaq and S&P 500 suggests that crypto investors may be influenced by external factors, while traditional investors may experience less satisfaction from their assets. This could lead to increased volatility in the crypto sector.

How can I best position myself as an investor in these uncertain times?
It's crucial to employ a sound risk management strategy. This may include regularly evaluating your positions, not investing more than you can afford to lose, and staying informed about economic indicators that can influence the markets.