Bitcoin dropped 7% over the past 24 hours, plunging to levels not seen since June as the digital asset market witnessed one of the worst sell-offs this year. Crypto traders were hit with $1 billion worth of crypto liquidation over the past 24 hours, according to a report.
The world’s largest cryptocurrency by market value was trading at around $26,400 at the time of writing, but bitcoin dropped briefly to $25,234 on Thursday. Altcoins performed slightly better with ether (ETH) losing 6% over the same time period and Solana’s SOL losing around 5%. Traders say market structure and liquidations were a likely reason for the sudden Bitcoin drop instead of a singular fundamental catalyst.
World’s largest cryptocurrency Bitcoin drops
After several days of declining prices, Bitcoin (BTC) drops 9% in less than 10 minutes to temporarily dip below $26,000. According to CoinGecko, the BTC price was hovering around $27,600 at 9:30 p.m. UTC on August 17 before falling more than 8% to $25,320 at the time of writing.
According to reports, Bitcoin fell on Thursday and momentarily dipped below $25,000 on Binance, the world’s largest crypto exchange, as Wall Street has become more risk-averse and August had been relatively uneventful.
Why the first mover Americas Bitcoin drops below $26.5K
“We’ve seen BTC OI ramp up in position, with a bias to shorts,” said Decentral Park Capital trader Lewis Harland. “The break below $28,500 led to material volumes of longs being liquidated. This has been combined with crypto liquidation ahead of the date (likely anticipating further delays).”
The Bitcoin Index reached its lowest point in two months. Ether (ETH) performed no better, falling 11% to approximately $1,600.
The Binance Coin (BNB) token, which is associated with the exchange where selling pressure was particularly intense, declined by nearly 7%.
Global interest rates continue to rise, particularly in the U.S., where the 30-year Treasury bond rose to 4.42 percent, its highest level since 2011, as per report. At 4.32, the 10-year yield is just one basis point away from a 15-year high.
This has contributed to a decline in the prices of crypto assets and risk assets in general. Despite maintaining its level today, the Nasdaq is approximately 6% lower for the month of August.
According to one market analyst, rising bond yields indicate a deteriorating equity investment case. Higher discount rates reduce cash flow valuations, and the equity risk premium has dropped to 2007 levels as a result of tighter credit
Bankrupt crypto firm Celsius
Creditors of bankrupt crypto firm Celsius will hold a vote on the lender’s plan to sell assets to the Fahrenheit consortium, after a judge on Thursday approved disclosures that suggested creditors can expect to recover 67%-85% of holdings. Approval marks one of the final steps on Celsius’ year-long march out of bankruptcy and the return of funds to customers, in a period which has seen widespread disruption in crypto markets and the arrest of former Chief Executive Officer Alex Mashinsky on fraud charges, which he has denied.
Ether futures ETFs
Securities regulators are poised to approve ether futures ETFs for the U.S. Several firms have applied to list these exchange-traded funds, which would hold derivatives contracts tied to ether rather than ether itself. But they need the U.S. Securities and Exchange Commission’s blessing, might be imminent. There are already U.S. ETFs that hold crypto derivatives: bitcoin futures ETFs. The industry is anxiously awaiting word on whether ETFs that hold bitcoin itself, not derivatives, might also get approval. Wall Street giants like BlackRock are seeking to create those, too.
The chart shows ether’s dollar-denominated price on Binance and slippage or the difference between the prices at which a trading order is executed and the price at which it was requested.
On Thursday, max slippage or the highest daily slippage on a single market order surged to highest since September 2022.
It shows worsening liquidity conditions in the market.
