This article covers the massive liquidations in the crypto market caused by recent stock market volatility and the broader economic context.
Points
- Over $272 million liquidated in the crypto market.
- Stock market volatility and economic uncertainty trigger sell-offs.
- Impact on Bitcoin and other major cryptocurrencies.
Massive Liquidations in the Crypto Market
The recent stock market volatility has caused a dramatic increase in liquidations in the crypto market, with over $272 million being liquidated. The Nasdaq Composite Index fell by 2.9%, while the Dow Jones lost up to 989 points. These events have prompted investors to reduce their exposure to risky assets, leading to increased selling pressure on cryptocurrencies.
The situation was exacerbated by a disappointing jobs report in the United States for July, which raised concerns about an imminent recession. As a result, investors have been reassessing their portfolios and moving away from high-risk investments, including cryptocurrencies.
The Outlook for Bitcoin and Influential External Factors
Analyst Valentin Fournier of BRN suggested that Bitcoin could soon retest the support level of $62,500. According to Fournier, the market appears to be in an accumulation phase, with a possible breakout above $70,000 in the medium term, provided that liquidity accumulates. However, he also highlighted growing uncertainty among investors, partly due to the performance of Bitcoin exchange-traded funds （ETFs）, which show limited net positive inflows.
Furthermore, current political forecasts in the United States indicate that Kamala Harris could surpass Donald Trump in the polls. This anticipation is causing concern among cryptocurrency investors. According to Ruslan Lienkha of YouHodler, Harris’s rise could lead to stricter regulations on crypto assets, potentially harming Bitcoin’s price.
Moreover, Bitcoin options show higher implied volatility for puts than for calls, suggesting that traders are preparing for a potential decline. Deribit’s weekly report indicates that the risk of a downside is increasingly anticipated by the market.
Conclusion
The recent stock market volatility and economic uncertainty have led to significant liquidations in the crypto market, impacting Bitcoin and other major cryptocurrencies. Investors should be cautious and consider the broader economic context when making investment decisions. The anticipation of stricter regulations and the performance of Bitcoin ETFs are key factors to watch in the coming months.
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