Krypto crash: The largest liquidation cascade in history
Bitcoin and the crypto markets suffered a sharp crash over the weekend, which led to the largest liquidation cascade in history. Over 2.3 billion of USD in lit crypto positions were forced within one day. While the Bitcoin price only acts -12% below the last highs, alternative cryptocurrencies such as Ethereum briefly lost -30%.
Uncertainty on the markets leads to correction
After Trump's election victory in November 2024, the crypto markets attracted a lot. The new US President promised the end of Operation Choke Point 2.0, a realignment of the SEC, deregulation of the crypto area and the establishment of a strategic bitcoin reserve. The prone dealer before taking office. Bitcoin told $ 67,000 to USD $ 108,000. Now we are watching the classic “Sell the News” disillusionment.
Political unrest in the Middle East, the outbreak of a trade war from the United States and restrictive signals from the Federal Reserve Bank also pressed the price. This led to a significant liquidation cascade of led positions. It caught over 2.3 billion USD, with more Ethereum than Bitcoin positions being hit. ETH briefly acted on $ 2,100 – a course that the cryptocurrency last reached in December 2023.
Altcoins suffer disproportionate
Not only Ethereum suffered from the correction. The entire Altcoin market has plunged -28% since last December. The alternative cryptocurrencies have so far not been able to break through the all -time high from 2021. Accordingly, the current crypto cycle remains strongly dominated by Bitcoin. The digital gold now accounts for 61% of the total market capitalization of all cryptocurrencies. Bitcoin dominance has not been that high since March 2021.
How things will go on at the crypto markets after this crash will be shown. Historically marked extreme liquidation cascades often the local low. A consolidation phase should follow the volatility. From a fundamental point of view, the cheaper regulatory environment in the United States and the growing institutional crypto acceptance speaks for a continuation of the upswing.
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Risk.
Plants and investments, especially in cryptocurrencies, are generally associated with risk. The total loss of the capital invested cannot be excluded. Cryptocurrencies are very volatile and can therefore be exposed to extreme price fluctuations in a short time.
