The main reason for the blow made to the Bitcoin price and global crypto market today
Bitcoin’s recent drop resulted in $312 million worth of liquidations, causing the total crypto market capitalization to plummet and the total losses of market participants to increase. While Bitcoin price is hovering around the $44,900-$45,000 zone, a drop below the strong support of the market leader could also be the starting point of a significant correction in the market.
The main reason for the collapse of the Bitcoin price and the crypto market
The market-leading cryptocurrency has dropped nearly 9%, from a high of $48,700 on Saturday to $44,436 earlier today. This unexpected drop caused $312 million to be liquidated in just one hour and a record of 332.41 million in the last 24 hours. On the Bybit exchange alone, nearly half of all Bitcoin positions have been liquidated, recording $153 million.
Data from crypto exchanges show a spike in BTC supply, which could lead to a further sell-off if Bitcoin continues to fall below the $45,000 support. At press time, the leading cryptocurrency is changing hands at $44,900.
The crypto market cap is currently hovering at $1.989 billion, down 7% from yesterday. There has been a 12.26% growth in the entire crypto market volume during the previous 24 hours. Besides that, DeFi’s 24-hour volume is 15.39% of the overall crypto market volume, or $14.71 billion.
Global crypto 7-day price chart | Source: CoinMarketCap.com
Dogecoin (DOGE) and Ethereum (ETH) have all seen their values fall somewhat over the weekend, putting pressure on the market. The news that Walmart would accept Litecoin (LTC), which turned out to be a hoax, caused a lot of confusion and lowered the value of several currencies as a result.
Other major altcoins such as Cardano (ADA) is down 11.19% on the day and 10.99% in the last seven days bringing its price to $2.11, while Solana (SOL), after reaching all-time highs, is down 14.41% in a day and 10.21% in the last week bringing its price to $138.24
Parallel to the drop in the crypto market, Hong Kong stocks also plunged. In particular, Hong Kong’s Hang Seng index fell nearly 7%, to a 52-week low. The bloodbath that the cryptocurrency market faces is may due to the drop in Evergrande Real Estate Group shares, a decrease recorded at 10.24%. Before that, this index also fell 17%. According to the 2021 Fortune Global 500 List, Evergrande Real Estate Group is the second-largest property developer in China by sales. It is also the 122nd largest corporation in the world by profit. Other Hong Kong property giants also faced a massive sell-off in stocks, Henderson Land Development Co.
Source: Bloomberg Crypto
Evergrande has debts worth almost $2 trillion. The growing concerns about the debt crisis of one of the largest real-estate companies have hit a wide range of markets: from bank shares to high-yield dollar bonds and Ping An Insurance Group Co. stocks as well.
Despite the price drop, various online data providers noticed a sudden spike in BTC supply on exchanges. This is seen as a negative sign because funds that appear on the exchange are usually recognized in the market at some point. In addition, the average long/short ratio is maintaining at 98% for long positions. This shows that the market is growing too hot. Various indicators such as the Relative Strength Index (RSI) have also demonstrated “overbought” levels in the long-term timeframe.
While the market does not show any signs of potential upside, on-chain data still indicates that the bull market is continuing, and the bears are still out of control. On-chain indicators like foreign exchange inflows still show no increased selling pressure in the crypto market, and the current correction is short-term.
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