Bitcoin, the primary crypto asset, witnessed a significant dip in price which affected other crypto assets and resulted in the liquidation of $420 million worth of long positions by crypto traders.
Cryptonews reported that 190,144 traders were liquidated with the total liquidations coming in at $480.93 million.
The $420 million out of the total liquidation figure belongs to traders who went long in their positions.
The liquidations occurred in various crypto exchanges with Binance, Okx, and HTX leading with a total of $372 million liquidated between them.
Bitcoin at the time of writing this report still trades for slightly over $64,000 with the entire crypto market in red.
It is a quite well-known pattern that when bitcoin suffers loss other crypto assets often follow suit. Ethereum, the second largest crypto asset by size and market cap also dropped to $3,300 losing its previous support level of $3500.
Other Altcoins are all experiencing significant drops in prices as the entire crypto market bleeds. Altcoins like Solana (SOL), Toncoin (TON), and Cardano (ADA) are down 8%, 6%, and 8%, respectively.
Meme coins are not left out in the red season as the top and previously promising ones are all in red as we write this report. Dogecoin (DOGE) is trading at $0.1221, down by nearly 10% in the last 24 hours. Other meme coins including Shiba Inu, PEPE, Dogwifhat, and Floki are down well over 10%.
The brutal June market general price drop reversed the previous memecoin frenzy which saw memecoins like Notcoin, Floki, and Pepe surge in prices.
The Role of the FOMC
- The Federal Open Market Committee (FOMC) which is an offshoot of the Federal Reserve recently held an important meeting where they decided not to change its interest rate citing more need for evidence that inflation in the country was cooling off.
- The crypto market reacted to the uncertainty surrounding this decision as we reported earlier.
- The FOMC’s decision not to cut rates resulted in various crypto assets crashing in price value.
- The FOMC is consequently planning only one rate cut in 2024 down from a previously forecasted three rate cuts.
- The US Federal Reserve’s actions influence the global economy, arguably including crypto markets. Low interest rates increase appetite for assets with higher risk and higher returns.
What you should know
- A long position in crypto, also known as “going long”, is a trading strategy that involves buying a cryptocurrency with the expectation that its value will increase over time.
- The goal is to sell the cryptocurrency when the price goes up and profit from the price increases. This trading position is seriously affected when prices drop, often leading to liquidations.
- On the other hand, a short in crypto is a trading strategy that involves borrowing and selling a cryptocurrency in the hopes that its price will drop. The trader then buys back the cryptocurrency at a lower price, returns the borrowed coins, and keeps the difference as profit
