In a staggering market downturn, crypto futures witnessed over $1 billion in liquidations within the last 24 hours, exacerbated by a robust Japanese yen and speculation around Jump Trading’s potential exit from the crypto market.

Ether (ETH) futures endured liquidations exceeding $340 million, while bitcoin futures led with a substantial $420 million in losses. Futures linked to Solana’s SOL, dogecoin (DOGE), xrp (XRP), and pepe (PEPE) collectively faced $75 million in liquidations.

A significant number of traders, over 275,000, saw their positions liquidated. The largest single liquidation occurred on the Huobi exchange—a BTC/USD trade valued at $27 million. Data reveals that approximately 87% of affected traders were long traders, those betting on price increases.

Bitcoin (BTC) plummeted more than 11% within 24 hours, while ether experienced a drastic 25% drop before a slight recovery. This marked the most severe single-day decline for ETH since May 2021, as prices tumbled from over $3,500 to $1,700. TradingView’s daily candle, reflecting UTC 00:00 to 23:59 performance, illustrated this dramatic fall.

The steep declines triggered the widely-followed crypto fear and greed index to signal “fear,” hitting its lowest point since early July. This index monitors volatility, prices, and social media data to gauge market sentiment, indicating fear as a potential sign of local market bottoms, while greed suggests market peaks.

Liquidations occur when an exchange forcibly closes a trader’s leveraged position due to insufficient margin. This happens when a trader cannot maintain the required margin for a leveraged position, leading to a partial or total loss of the trader’s initial margin.

The sell-off began last week amidst geopolitical tensions in the Middle East and disappointing earnings reports from tech firms, dampening the recent artificial intelligence (AI) investment enthusiasm and prompting a retreat from high-risk assets.

The market rout deepened early Monday as the yen surged to seven-month highs, driven by heightened expectations of further rate hikes by the Bank of Japan and the unwinding of carry trades. Tokyo’s Topix 100 index recorded its most significant drop since 2011.

Key Highlights:

• Bitcoin & Ether Declines: BTC fell over 11%, ETH dropped 25% before minor recovery.
• Massive Liquidations: $1 billion in liquidations, with BTC and ETH futures hit hardest.
• Trader Impact: Over 275,000 traders liquidated, predominantly long positions.
• Market Sentiment: Crypto fear and greed index signals extreme “fear.”
• Geopolitical & Economic Factors: Middle East tensions, tech earnings reports, and strong yen exacerbate sell-off.

By maintaining a vigilant eye on macroeconomic indicators and geopolitical developments, traders can better navigate the volatile crypto landscape, mitigating potential losses and identifying opportunities amidst the turbulence.