Investors who made leveraged bets in the famously volatile markets are facing a lot of pain as a result of the recent price falls in Bitcoin and key altcoins, resulting in around $340 million in liquidations just today.
On Monday, more than 106,000 trades were liquidated as bitcoin fell below $40K for the first price since September. BitMex had the most liquidation, with a total value of $5.95 million.
After the minutes of the US Federal Reserve meeting indicated policymakers contemplated aggressive interest rate hikes and accelerating the normalization of their balance sheets, prices of the flagship crypto fell for six days in a row this week.
The pioneer cryptocurrency fell again on Tuesday, despite a minor comeback over the weekend.
According to FTX data, Bitcoin was trading at over $40K at press time, down around 1% in the previous 24 hours. The most valued cryptocurrency briefly went below $40K in the early hours of the day before rising above $41.5K.
Tighter financial conditions are expected to hurt risk assets like equities and cryptocurrency, making them less appealing than safe-haven bonds.
Investors responded significantly to expectations of monetary tightening following the Federal Reserve’s December meeting. The Bitcoin price was extremely volatile throughout this time.
Aside from Bitcoin, all of the big cryptos had a down day on Monday.