By
Temitope Olatunji
April 24th, 2024
The first signs of the turmoil came last Tuesday after the CPI data showed inflation is still on the horizon.
Within the last 24 hours, liquidated trading positions have exceeded $400 million as the crypto market began the week with a bearish outlook.
Data from Coinglass suggests that 130,087 traders were liquidated, with Bitcoin (BTC) leverage traders losing around $44.5 million. Also, Ether (ETH) traders lost $8.39 million while Cardano, Polkadot, Shiba Inu, and Polygon crashed to new lows. Long traders on several exchanges were the ones mostly affected by the losses.
While the crypto market has been battered all year long, losing nearly $2 trillion wiped off its value since last November. However, it’s been worse since September started. The recent liquidations have now pushed the total crypto market cap below $1 trillion again, at a loss of about $60 billion daily.
Market Turmoil Due to Macroeconomic Factors
There are indications the market turmoil may be due to macroeconomic factors. The first signs of the turmoil came last Tuesday after the CPI data showed inflation is still on the horizon. Geopolitical tensions and rising fuel and food prices have made it difficult to keep inflation in check.
With a Fed meeting scheduled for September 21, the world expects that the Fed will announce a further hike to control inflation. Previously, the SEC announced a 75-basis point hike, making it likely that a 100-basis point hike is next.
Meanwhile, analysts believe that the migration of Ethereum to Proof-of-Stake is partly responsible for the selloff. According to Mark Cuban, the Merge was a buy the rumor, sell the news event. This appears to be the case with Ether, where the price climbed to $2,000 in the build-up to Merge. Currently, the coin is trading below $1,300, with an 11% decline in the last 24 hours alone.
Crypto Market Should Expect a Bullish Run
Meanwhile, popular trader, Cantering Clark expects another bullish run before the year ends. Clark pointed out that both the stock and crypto market was moving in tandem with one another. Afterward, he pointed out similarities with the trend in the 1970s.
Going by this analysis, Clark believes the months of November and December will see the market rally. Despite the relationship between the stock and crypto market, the S&P 500 has performed better than cryptocurrencies by a significant margin. However, its year-to-date (YTD) figures are also low.