A new round of selling in the crypto market was triggered by fears regarding the potential default of Evergrande Group, a China-based real estate company whose collapse could send ripples through equity markets.
At the time of writing this report, 182,798 traders had been liquidated for the day. Liquidation orders on Bitfinex-ETH valued at $14.52 million were the largest single transaction.
As of press time, Bitcoin appears to have stabilized just above the $40,000 support level after Tuesday’s sell-off. After such a plunge, analysts expect a near-term end to BTC’s pullback later this week.
Delphi Digital, a crypto research firm, noted in a Tuesday report that funding rates had been high before the flash crash earlier this month.
Nevertheless, this time around, the market was not as aggressive, resulting in a slightly better result.
Traders could be in for some increased volatility in the coming weeks as a result of the developments around Evergrande.
In the short term, technical charts show strong overhead resistance at $55,000, which may limit short-term purchasing. Due to the U.S. Federal Reserve’s policy meeting concluding on Wednesday and the quarter-end Bitcoin options expiry on Friday, volatility could remain elevated this week.
An anonymous cryptocurrency expert contacted by Nairametrics explained it is long overdue to see a parabolic rise after this year’s relative bullish move.
Several weeks ago, the Financial Conduct Authority, a leading financial regulator in the United Kingdom, publicly warned investors about the risk of trading crypto assets.
Investing in Bitcoin and other crypto-assets comes with a high risk of losing all funds, according to the statement.