Crypto Crash: $10B in Liquidations?
Massive Crypto Liquidations Following Market Crash
The crypto market experienced a sharp downturn, potentially resulting in $8 billion to $10 billion in total liquidations across exchanges, according to Bybit CEO Ben Zhou. This follows a significant market sell-off triggered by recent tariff announcements.
Key Takeaways:
- Bybit estimates $8B-$10B in total crypto liquidations.
- API limitations lead to discrepancies in reported liquidation data.
- Bybit pledges to publish more comprehensive liquidation data going forward.
Bybit itself reported $2.1 billion in liquidations within 24 hours—a stark contrast to Coinglass's reported $333 million. This discrepancy highlights the challenges in accurately tracking liquidations across various exchanges due to API limitations on data feeds. Bybit's CEO explained that many exchanges limit the amount of data pushed per second to manage this issue. To improve transparency, Bybit will start pushing all liquidation data.
Market Reaction and Impact
The market reacted swiftly to the news, with Bitcoin falling below $92,000 for the first time since January. Ethereum and other altcoins also experienced double-digit losses. Coinglass data independently confirmed over $2 billion in liquidations across crypto derivatives exchanges during this period.
The Crypto Fear & Greed Index plummeted from 60 to 44, entering the "fear" zone—its lowest point since October 11. This reflects the market's heightened uncertainty and risk aversion.
The sell-off is linked to the announcement of new tariffs by the President. These tariffs, impacting imports from Canada, Mexico, and China, are expected to worsen inflation, potentially destabilizing the economy. While some analysts see this as increasing Bitcoin's appeal as an inflation hedge, others warn of broader economic consequences.
The Federal Reserve's decision to hold interest rates steady last week adds another layer of complexity. Future rate adjustments will depend on upcoming economic data and inflation trends. The Fed's assessment of the President's economic policies will also play a crucial role in shaping future decisions.
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