Bitcoin Plummets to $65K Amidst $400M Cryptocurrency Market Liquidation

The price of Bitcoin (BTC) experienced a sudden 5% drop on April 12, leading to significant losses for traders with leveraged positions in Bitcoin and other cryptocurrencies. Within just one hour, BTC fell from $68,341 to as low as $65,110 during the late New York session trading hours. Following Bitcoin’s lead, Ether (ETH), the second largest cryptocurrency by market capitalization, also fell 8%, dropping from an opening of $3,553 to trade at $3,226.

According to futures market data from CoinGlass, the flash crash of Bitcoin resulted in over $400 million in losses for leveraged positions within one hour. Specifically, Bitcoin long positions accounted for over $77.93 million in losses, while Ether long positions contributed more than $63.35 million to the overall figure. Binance, a popular crypto exchange, saw the highest number of short and long liquidations, totaling $171 million. Traders on OKX, another cryptocurrency exchange, collectively suffered losses of $158 million. CoinGlass also reported that a total of $860 million in liquidations occurred in the past 24 hours, involving 270,993 traders.

This sudden crash coincided with a dip in U.S. stock markets during the U.S. trading session. A few days earlier, new data had revealed that inflation had been accelerating for three consecutive months, causing concerns about the possibility of the Federal Reserve implementing rate cuts. This data further exacerbated fears about high price levels. JPMorgan Chase CEO Jamie Dimon warned on April 12 that “persistent” inflation, geopolitical tensions, and the Fed’s efforts to tighten its quantitative easing policies could potentially jeopardize the positive economic outlook. Dimon stated that the market could be burdened by the continuation of “persistent inflationary pressures.”

Bitcoin and Ether experienced significant drops in their prices, resulting in substantial losses for traders with leveraged positions. The crash wiped out over $400 million in leveraged positions within one hour. Binance and OKX were the exchanges affected the most, and a total of $860 million in liquidations occurred within the past 24 hours. The crash occurred simultaneously with a dip in U.S. stock markets, following new data showing a continuous increase in inflation. JPMorgan Chase CEO Jamie Dimon expressed concerns about the impact of inflation, geopolitical tensions, and the Federal Reserve’s quantitative tightening efforts on the economy.