CandleFocus

Here’s What Triggered the Latest Bitcoin Liquidation Event

Author: Content Editor
The cryptocurrency market experienced its largest liquidation since September 2021, with Bitcoin plunging 10% in a flash crash. This event triggered a cascading effect, leading to severe losses for altcoins and wiping out over $1.7 billion from traders. Some market experts have raised questions about manipulation, highlighting anomalies such as aggressive selling on Coinbase before the crash began. Pseudonymous analyst Ltrd pointed to spiking funding fees and increased open interest as indicators of an overheated market. The liquidation cascade intensified the crash, with stop-losses and liquidations contributing to the decline. Certain cryptocurrencies, like Ethereum, showed strong buying pressure after the dip, while XRP experienced a severe sell-off due to low liquidity. Unexpected volume spikes in assets like Cardano, USDC, and FDUSD have raised concerns about market manipulation. Some traders speculate that centralized exchanges may have engaged in "liquidation hunting." However, not all agree, with some suggesting that the sell-off may have been from platform traders rather than the exchange itself. Analysts note that large-scale liquidations can have a cleansing effect on the market, creating opportunities for smart money to buy at discounted prices.

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