Crypto Market Updates Today
• Bitcoin (BTC) is trading around $113,429, down about 2% from its previous close.
• Ethereum (ETH) is around $3,505, down approximately 4.4%.
Why is the market so volatile?
The extreme volatility in the cryptocurrency market today can be attributed to several interconnected factors:
1. 24/7 Trading and Sensitivity to Sentiment
The market operates around the clock with the immediate impact of news, social media, and government statements—making it highly reactive to any global event.
2. Use of Leverage and Forced Liquidations
Many traders use leverage in futures contracts. When the market moves against their positions, automatic liquidations occur, creating a domino effect of rapid declines.
3. Movements by Large Holders ("Whales")
Large-scale sales or purchases by large holders can trigger abrupt movements, affecting the entire market.
4. Regulatory and Macroeconomic Uncertainty
Growing adoption by companies and favorable policies coexist with risks such as hacks, pending regulations, and geopolitical tensions, which generate instability.
Recent Liquidation Values
Liquidations in the cryptocurrency market can reach billions in volumes in short periods, especially during volatility storms:
• 284,000 traders liquidated US$881 million in 24 hours, with Binance standing out as the main platform.
• Another scenario indicated 38,866 traders liquidated, totaling US$128 million in losses in the last 24 hours.
• Studies report liquidations of close to US$160 million in a single day, with the majority in ETH and BTC, and a predominance of short positions.
• Massive events at the beginning of the year netted more than US$2.2 billion in a single day, affecting more than 700,000 traders
Estimates of total magnitude
For illustrative purposes:
• In periods of sharp declines, more than US$2 billion can be liquidated in 24 hours, impacting hundreds of thousands of traders.
• Even amounts of US$500 million to US$1 billion are common during periods of sharp rises or rapid declines.