The cryptocurrency market lost more than $200 billion in just 24 hours after the panic among retail traders caused a crash in Bitcoin and Ethereum. The world’s largest crypto asset, Bitcoin dropped below $49,000 on Tuesday as the total market cap of BTC reached $920 billion.
Ethereum, the world’s second-largest cryptocurrency reached its lowest level in 3 weeks after ETH dropped below $1,600. The total market cap of Ethereum stands at around $180 billion, which is down from $230 billion on 20 February.
The total value of the cryptocurrency market topped $1.74 trillion on Saturday after Bitcoin jumped above $58,000 and Ethereum reached $2,000. The market is in a bearish scenario since then because of heavy selling pressure from retail traders. As of writing, the total market cap of digital assets is hovering around $1.5 trillion.
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According to the latest data published by crypto analytics firm, Bybt.com, the recent crash in Bitcoin and other cryptocurrency assets liquidated more than $4 billion worth of long positions in the last 24 hours. BTC remained at the top with the liquidation of $2 billion worth of long Bitcoin positions. Bybt.com mentioned that the largest single liquidation order happened on Huobi after $20.66 million worth of long Bitcoin positions got liquidated due to the crypto market crash.
A similar crash happened during the second week of January 2021 after the cryptocurrency market lost nearly $170 billion within a single day. The volatility in digital assets has increased in the last few months due to huge demand from retail and institutional investors, but the limited supply and liquidity crisis remained the biggest risks. Nikolaos Panigirtzoglou, a strategist at JP Morgan, pointed out recently in his research note that Bitcoin’s liquidity has deteriorated in the last few months. Furthermore, the cryptocurrency whales are moving large amounts from leading digital exchanges to cold crypto wallets as the supply of digital assets at crypto exchanges plunged to the lowest level in more than 2 years.