Solana plunged more than 20% to trade near $110 as cryptocurrency traders saw more than $1 billion in trading positions wiped out in the past 24 hours.
SOL fell as Bitcoin led the cryptocurrency market through a carnage, with BTC testing lows of $49,000 and Ethereum falling below $22 million. Solana traded as high as $145 on Sunday night before falling sharply on Monday, testing the $111 price level.
The decline in SOL and other cryptocurrency markets comes as investors worry about a U.S. recession, triggering a global stock market crash. The Federal Reserve’s interest rate policy is also a major concern, while geopolitical tensions are also a factor.
“I’m calling for an emergency 75 basis point cut in the federal funds rate and saying that another 75 basis point cut would be the minimum at next month’s September meeting,” Wharton’s Jeremy Siegel said. pic.twitter.com/s4CgWx962Q
— Squawk Box (@SquawkCNBC) August 5, 2024
In the cryptocurrency market, jitters over Jump Trading’s selling pressure exacerbated losses for ETH and other altcoins.
Cryptocurrency liquidations exceed $1 billion
Hundreds of cryptocurrency traders experienced massive liquidations as cryptocurrency prices plummeted on Monday, with the total market capitalization falling 17% to below $1.9 trillion.
coin glass Data Display Early Monday, total liquidations jumped more than 400% to more than $1.1 billion. These are primarily long positions, with data showing more than $962 million in leveraged positions to bullish cryptocurrency prices.
Amid BTC’s collapse and broader market decline, the number of cryptocurrency traders liquidating surged to over 301,700 in 24 hours.
As of this writing, liquidations total $1.14 billion, with the largest single liquidation order wiping out $27 million of BTC.USD on cryptocurrency exchange Huobi.
It is worth noting that the short liquidation amount in 24 years was only $174 million, of which $64 million was bearish on BTC and $50 million was bearish on Ethereum.
Cryptocurrency Market Turbulence
Recently, the cryptocurrency market experienced significant turbulence, with Solana’s value plummeting by over 20% to trade near $110. This drastic drop led to more than $1 billion in trading positions being wiped out within just 24 hours. The decline in Solana’s price was closely tied to the overall market performance, with Bitcoin and Ethereum also facing substantial losses.
Factors Contributing to Market Uncertainty
Various factors have contributed to the recent market uncertainty. Concerns over a looming U.S. recession, coupled with global stock market crashes, have added to investor unease. Additionally, the Federal Reserve’s interest rate policy and geopolitical tensions have further fueled market volatility.
Impact of Liquidations on Traders
As cryptocurrency prices plunged, hundreds of traders experienced massive liquidations, with total liquidations surpassing $1 billion. These liquidations primarily targeted long positions, with a significant portion of leveraged positions being bullish on cryptocurrency prices. The surge in liquidations resulted in a high number of traders being forced to close their positions within a short period.
