Today, news of massive liquidations rocked the crypto trading world, with over 67,000 crypto traders losing more than $258M in just 24 hours. The losses came after the Federal Reserve announced an increment in interest rates and introduced new regulatory actions.
Over $257 Million In Liquidations Occur Amid US Central Bank And SEC Activities
Crypto traders experienced a challenging day, with over 68,000 positions liquidated in the last 24 hours, raising the total amount of crypto liquidations to more than $257M. This occurred after the US Federal Reserve’s 25 basis point rate increase and the SEC continued its enforced regulation on crypto companies.
According to on-chain data from Coinglass, liquidations on Bitcoin, Ethereum, and XRP were the main contributors to this trend. At the time of writing, the total amount of liquidations on Bitcoin was close to $132M, with Ethereum traders losing approximately $51M based on current market value.
Additionally, around $8 million in liquidations were from XRP positions. According to Coinglass, the most significant single liquidation order worth $7.39M occurred on Bitmex.
Various analysts speculated that the central bank could halt its monetary policy tightening amid difficulties in the banking sector. However, with consumer inflation rising to 6% year-over-year per the last official data, the Federal Reserve decided not to pause.
Following the liquidations in the last 24 hours, the overall evaluation of the crypto market has dropped by 2%. Nevertheless, the total market capitalization remains higher than $1T.
Bitcoin has also dropped in value within the same period, but it’s still maintaining a solid position above the $27K price level. The latest CoinShares Digital Asset Fund Flows Weekly Report indicated that digital asset holders had withdrawn nearly $500M in the previous six weeks.
The report suggested that the outflow was driven by the need for liquidity during this banking crisis rather than a pessimistic outlook and was similar to the response when the COVID pandemic first began.
SEC Continues To Enforce Crypto Regulations
The US Securities and Exchange Commission recently launched a lawsuit against Justin Sun, BitTorrent Foundation, Rainberry Inc, the TRON Foundation, Deandre Cortex Way, and Austin Mahone for selling unregistered securities.
Additionally, the commission revealed that eight celebrities, including Jake Paula and Lindsay Lohan, were charged with promoting unlawful crypto-related products.
Despite this, many in the crypto industry are hopeful of the long-term benefits of the crypto sector. Ark Invest chief executive, Cathie Wood, believes the banking crisis could encourage institutional investors to re-enter the system, thanks to Bitcoin’s remarkable resilience.
She also observed that Bitcoin behaved differently than the stock markets and thought this behavior during the crisis would draw more institutions to it.
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