In the wake of the most recent price declines in Bitcoin and major altcoins, investors who made leveraged bets in the notoriously volatile markets are suffering a wide range of pain, causing about $340 million in liquidations simply for today.
As bitcoin dropped below $40K for the very first time since September, significantly more than 106,000 trades were liquidated on Monday. BitMex had the biggest liquidation, valued at $5.95 million.
In the past week, prices of the flagship crypto dipped for six straight days following the minutes of the United States Federal Reserve’s meeting revealed policymakers discussed aggressive interest rate hikes and accelerating the normalization of these balance sheets.
A tiny recovery on the weekend didn’t stop the pioneer crypto from falling again on Tuesday.
Cryptocurrency Bear Market
FTX data shows Bitcoin changed hands at above $40K at press time, down about 1% previously 24 hours. In the first hours of the afternoon, the absolute most valuable crypto fell below $40K briefly before moving back above $41.5K.
Risk assets like equities and crypto are predicted to be negatively suffering from tighter financial conditions, while they become less attractive than safe-haven bonds.
In the wake of the Federal Reserve’s December meeting, investors reacted strongly to expectations of monetary tightening. This period was marked by high volatility in the Bitcoin price.
Besides Bitcoin, the major cryptos all experienced a down day on Monday. At one time, Ethereum, the second-biggest crypto by market valuation fell below $3K but has since recovered to above $3K.