U.Today – Long-time DeFi researcher Miles Deutscher sums up a number of reasons that could be behind the current crypto bloodbath. It seems that the combination of global macro catalysts, along with important crypto-specific developments, resulted in this “perfect storm.”
From Japanese Yen to Mt. Gox: What Drove Cryptocurrencies to Multi-Month Lows?
Crypto analyst Miles Deutscher shares the main catalysts that led to the most drastic drop in cryptocurrency market cap in many months. According to him, to a large extent, this surge in volatility should be attributed to geopolitical tensions around the world and changing sentiment in the US presidential election race.
In macroeconomic terms, the depreciation of the Japanese yen could also have contributed to the collapse of cryptocurrency prices. As U.Today reported earlier, the asset gained an incredible 10% in less than 30 days along with the US dollar.
At the same time, the Stock Average 225, an index of shares of Japan's largest companies, experienced its worst drop since Black Monday in 1987.
Investor pessimism was then triggered by the publication of alarming unemployment rates in the US. The jobless rate rose to 4.3% in July, up 0.2% from June, according to the BLS report on Friday.
Fears of an accelerating recession are gripping the market as heated debate escalates over the need for emergency rate cuts by the US Federal Reserve in August or September.
However, crypto-native bearish catalysts also did their job. The overall effect of Mt. Gox’s compensation distribution remains to be seen, while major trading firm Jump Crypto could be selling its positions.
$27 million lost in a single BTC liquidation today
In recent days, Jump Crypto was reportedly unlinking over 120,000 wETH from Lido Finance to sell it immediately.
Additionally, a mysterious whale obtained $120 million worth of SOL from various validators and sent the coins to Coinbase (NASDAQ:) Prime, says Colin Wu.
The market is therefore in the midst of its most painful drop in months. A total of $1.2 billion in cryptocurrency positions were liquidated in the past 24 hours, the highest figure since mid-April; 85% of these were long positions.
The largest single liquidation was recorded on Huobi, with a trader seeing their $27 million (BTC) long position wiped today, according to data from CoinGlass.
This article was originally published on U.Today
