Recently, the cryptocurrency market experienced a sudden decline, with all digital currencies plummeting simultaneously. Both Bitcoin (BTC) and Ethereum (ETH) saw a drop of over 1%, accompanied by significant sell-offs in DeFi tokens. In the last 24 hours, nearly $140 million in cryptocurrency has been liquidated.
This sell-off was triggered by Binance’s announcement that it would be shutting down its Binance Connect buy-and-sell service just one year after its launch. The exchange has stated that it wants to refocus its efforts on its core products and long-term objectives. Even though the service only supported 50 cryptocurrencies, the sell-off had a wider impact.
Reasons Behind the Recent Market Selloff
According to data from Coinglass, there was a liquidation of $129 million in long positions in a single day. In the past 24 hours, nearly 63,000 traders have been liquidated, with the largest single liquidation order being for Binance’s ETHUSDT pair, valued at $2.34 million.
Dogecoin, Litecoin, XRP, Solana, and Shiba Inu are among the cryptocurrencies that have seen the most liquidations in the past 24 hours.
In addition to Binance’s announcement, traders and whales also considered other factors when deciding to sell. These include the release of the FOMC Minutes, Elon Musk’s decision to end XPro (TweetDeck) as a free offering, and the potential release of the Shibarium mainnet today.
On Tuesday, US stock market indices also fell by more than 1% due to concerns about the banking sector and a weakening Chinese economy.
FOMC Minutes will help indicate clear guidance of the US Federal Reserve over further rate hikes. A dovish approach could potentially restore momentum to the markets. The US dollar index (DXY) is currently hovering near the 103.15 level, indicating that macroeconomic factors have not had a significant impact on cryptocurrency prices.
The release of Shibarium could be a “buy the rumor, sell the news” event. Amidst mostly neutral market sentiment, the price of SHIB may continue to decline. Whales that recently started buying can sell their SHIB and BONE holdings.
According to well-known analysts such as Rekt Capital and Michael van de Poppe, the crypto market may continue to experience a decline in prices. Additionally, a bull flag breakout for BTC dominance could spell trouble for altcoins.
At the moment, BTC is trading at $29142, which represents a 1% decrease over the past 24 hours.