Individuals who receive crypto notifications on their cell phones can attest that crypto markets today tanked. Bitcoin recorded an 11% loss, Ethereum is 15%, with a drop of 13% in the 24hour total market capitalization. This data was an extract from CoinGecko.
El Salvador’s Bitcoin Adoption Results In Price Surge
However, the notification didn’t explain why they were crashing or correcting since everything has been moving swimmingly. Also, Ethereum-based NFTs engage in boffo business, and Bitcoin is now a legal tender in El Salvador.
Vetle Lunde, an analyst with Arcane Research, told Decrypt that such huge stories lead the crypto market to exaggerate pricing. He added that this might have been the issue presently.
Related Reading | Demand For Crypto Mining Rigs Surges In Vietnam Due To Bitcoin Growth
However, on June 4th, traders who bet on future crypto prices received just a little bullish. This was a day before the El Salvador president’s announcement on submitting a bill to adopt Bitcoin as legal tender.
Bitcoin was previously worth $37,000 before the announcement. Then, it rose back again to $53,000 in three months. But when the day, which coincidentally was yesterday, September 7th came, the price dipped.
However, the long-leveraged positions increased the dip. For instance, crypto traders can receive 100 times leverage on the exchange Bybit. This means that you are allowed to trade 10 Bitcoins if you invest one-tenth of a BTC. Receiving leverages are fun once there is a price rise. It enables speculators with less capital to also gain from the market bull.
Bitcoin is still trading downwards on the daily chart | Source: BTCUSD on TradingView.com
The price drip yesterday was enough to induce liquidations for those who have been long on Bitcoin. This means that the price drop made more investors sell off their holdings, increasing the liquidation rate.
Ethereum And Other Crypto’s Prices Tank Abruptly
According to Lunde, the altcoins’ bullish appetite in the past months could have led to price exaggerations in the market.
However, a close analysis reveals that it’s still the altcoin’s good month. For instance, Cardano records a 60% rise even with the 17% slash of today. In addition, it plans to launch a smart contract on its network this weekend.
Ripple XRP, despite today’s 23% decline in price, is still up for the month by 34%. Binance coin in the past 24-hours lost 18% but is still high by 15% considering the price last month. However, traders of altcoins also evaluate that the price would keep rising.
Related Reading | Bitcoin Notices Immense Rise In Price Ahead Of El Salvador’s Adoption
Based on the data from a platform trading on futures Bybt, the 24-hour liquidation volume of Bitcoin is about $1.5billion. For Ethereum, $900 million has taken the same path.
However, it seems Solana has immune to the mayhem. SOL price keeps setting a new all-time high a couple of times weekly. It has displaced XRP by market capitalization to become the 6th largest crypto.
Featured image from Pixabay, chart from TradingView.com