Crypto Market Faces Turbulence: What Happened Today?
The cryptocurrency market has been hit by a wave of volatility following U.S. President Donald Trump’s proposal to select Kevin Warsh as the next Federal Reserve chair. This unexpected development sent shockwaves through financial markets, leading to a dramatic sell-off in gold, Bitcoin (BTC), and other cryptocurrencies.
$1.7 Billion Liquidations Shake the Market
Over the past 24 hours, more than $1.7 billion in leveraged positions were liquidated, significantly impacting over 270,000 traders. According to data from Coinglass, leveraged bulls accounted for the majority of losses, with an astounding $1.6 billion wiped out. The selling pressure pushed Bitcoin dangerously close to its $80,000 support level, with large-cap altcoins suffering an average price decline of 7-10%.
Bitcoin and Ethereum Under Pressure
Bitcoin briefly dipped to $81,000 before finding temporary stability at $82,300 at press time. Ethereum (ETH), on the other hand, broke below its $2,800 support level but seems poised to reclaim it as it gradually recovers. Altcoins like Solana (SOL) and Ripple (XRP) also faced heavy losses, with SOL dropping 10% to $114 and XRP slipping below $1.80. In total, the crypto market lost $200 billion in valuation, reducing the global market cap from $3 trillion to $2.8 trillion.
Stablecoins See Major Redemptions
Not only did leveraged traders face losses, but stablecoin redemptions further highlighted an evident risk-off sentiment. Over $2 billion of capital exited major stablecoins like Tether (USDT) and USD Coin (USDC) earlier this week. Circle’s USDC experienced a redemption of nearly $5 billion in seven days, while Tether’s USDT saw a supply reduction of $1 billion in the last month. These redemptions indicate a significant reduction in dry powder available for future market rallies.
What’s Next for BTC and Altcoins?
The extreme caution in the market is reflected in options trading, with institutional players hedging against downside risks for Bitcoin to hit $78,000 or even $75,000 in the coming weeks. According to Arkham data, bearish sentiment continues to dominate as investors anticipate further volatility. Crypto market experts, including Fundstrat’s Tom Lee, predict turbulence will persist until the Federal Reserve chair selection is finalized.
Healthy Reset or Cause for Concern?
While some analysts view the recent leverage flush as a healthy reset for the market, the continued exits by stablecoin investors signal deeper concerns. Can the crypto market recover from this setback or will more declines follow?
Explore Market-Tracking Tools
To navigate the ever-changing crypto landscape, using reliable tools is crucial. Consider Coinglass to monitor liquidations and sentiments in real time and help guide your trading decisions during heightened volatility.
