Key Takeaways
- Over $1.6 billion was wiped out from long positions.
- Analysts predict a second Fed Reserve rate cut in October.
- September is historically the worst-performing month for crypto market returns.
A gigantic $1.7 billion was liquidated from the crypto markets over the past 24 hours as macroeconomic factors and uncertainty forced an abrupt correction after weeks of upward momentum.
Crypto Wipeout
It’s been a rocky start to the week for crypto as market movements trigger a historic $1.7 billion in liquidations across major assets, as investors move cautiously through an uncertain September.
According to CoinGlass data, crypto liquidations topped out at almost $1.7 billion, with Bitcoin (BTC) posting double-digit losses.
It was followed by the likes of Ethereum (ETH), Ripple (XRP), and Solana (SOL), which suffered declines of around 8%.
A vast majority of this figure, $1.615 billion, was wiped out from long positions.
Ethereum suffered the most significant losses, shedding around $483 million in 12 hours. Bitcoin took second place with $276 million in liquidations during that same time.
Market Conditions
Crypto markets were moving bullishly in the lead up to the U.S. Federal Reserve’s rate cut announcement on Sept. 17.
Following this, markets saw a moment of heightened enthusiasm, but were unable to hold out against bearish pressure mounting from recession fears.
That said, there’s still a high chance that another rate cut is coming later down the line, which could pull markets from “Redtember” this month into the fabled “Uptober”.
Ten out of twelve Octobers have been bullish since 2013, and the past six have seen considerable market rallies.
BitMEX co-founder Arthur Hayes posited that the markets will hit an “up only” phase once the U.S. Treasury General Account (TGA), which is essentially the government’s bank account with the Fed, reaches $850 billion.
To refill it, the Treasury issues fresh debt and pulls liquidity from the broader financial system.
And so, to hit that $850 billion mark, it has been offloading billions worth of Treasury Bills and bonds, which is cash that could have otherwise been directed to stock and crypto markets.
Once refilled, the drain stops, though it’s debated if new liquidity will come in as a direct result of the $850 billion cap being reached. Though it may inspire investors to make some riskier bets.
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
