HomeBusinessOver $1 Billion in Crypto Market Liquidations as Bitcoin Hits 2-Month Low

Over $1 Billion in Crypto Market Liquidations as Bitcoin Hits 2-Month Low

After hitting a two-month low of around $25,400, Bitcoin recovered some losses in Asia Thursday morning to trade around $26,800. Ether also fell dramatically to lows around $1,550 before recovering to just below the $1,700 line. All other top 10 non-stablecoin cryptos recorded losses as macroeconomic factors – including the depreciation of the Chinese yuan and the bankruptcy of Chinese real estate giant Evergrande – hit investor sentiment. Overall, investors liquidated $1 billion worth of cryptocurrencies, pushing the total market cap to the brink of the psychologically significant $1 trillion threshold.

XRP led the losers, after a US judge allowed the US Securities and Exchange Commission (SEC) to file a motion to appeal the recent favorable ruling for Ripple Labs regarding the retail sales of token XRP . Meanwhile, the Forkast 500 NFT index fell, but the increase in the number of transactions continued. US stock futures stabilized after Wall Street closed lower on Thursday. Release of minutes from July Federal Reserve meeting continues to fuel concerns about further monetary tightening ahead

Bitcoin, Ether slide after giving up key support levels

Bitcoin is down 7.02% over the past 24 hours to $26,819.27 as of 7:20 a.m. in Hong Kong, with a weekly loss of 8.88%, according to data from CoinMarketCap. The world’s leading cryptocurrency reached a two-month low of US$25,409.11 early Friday morning.

“During late trading volumes in the US/early Asia, Bitcoin prices broke the critical support level at US$28,000. We knew a crash (or sharp drop) could be coming,” Markus Thielen, head of crypto research at digital asset service platform Matrixport, wrote in an emailed note.

“The realized volatility was 18%; the last time volatility was this low, in November 2018, Bitcoin’s realized volatility spiked to over 100% after 30 days as prices crashed by 46%. In Bitcoin, sharp price drops often followed periods of low volatility. We don’t predict such a significant drop, but at least expected a -13% drop (prices have dropped -10% so far.”

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There is also a looming shadow of macro risk to be reckoned with, Thielen added.

The biggest is a potential devaluation of the Chinese Yuan, which is trading at its weakest level since 2007. In August 2015, when China devalued the Yuan for the last time, Bitcoin prices fell -23% during the two weeks following the devaluation,” he said.

Adding to the bearish sentiment in Bitcoin, a Friday report from The Wall Street Journal showed that Elon Musk-founded rocket company SpaceX has written down the value of its Bitcoin holdings by a total of $373 million over the past two years.

“This is really a thing of the past (but) it is still news and investors understandably saw this as a bearish catalysis on top of macro moves,” said Justin d’Anethan, head of APAC business development at Belgium-based crypto market maker Keyrock.

Along with Bitcoin, Ether fell 5.64% to $1,706.22 and lost 7.80% in the past seven days, after reaching a five-month low of $1,551.71 early Friday morning.

Other top 10 non-stablecoin cryptocurrencies all traded lower.

Cryptocurrencies saw a total liquidation of US$1 billion in the past 12 hours, with US$812.67 million in long positions – positions where investors bet that the cryptocurrency price will rise – wiped out, according to data from crypto information platform CoinGlass.

Ripple’s XRP token led the losers, dropping 12.52% to US$0.5136 for a weekly loss of 18.85%.

In the ongoing legal battle between Ripple Labs and the SEC, Judge Analisa Torres on Thursday granted the SEC’s request to appeal an earlier summary judgment in favor of Ripple.

In June, Torres ruled that Ripple’s programmatic sale of XRP did not violate securities laws, while its sale to institutional investors did. The ruling was seen as a partial victory for Ripple. The SEC first sued the company in December 2020 for offering unregistered digital asset securities — an allegation Ripple denies.

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“The appeal request (even if granted) does not change the fact that XRP is not a security. That is not up for debate/lawsuit,” Ripple Chief Executive Officer Brad Garlinghouse said in a tweet Wednesday.

According to the court filing Thursday, the SEC will file a motion for an appeal on Friday and Ripple has until September 1 to file its opposition papers.

Total cryptocurrency market capitalization fell 5.69% over the past 24 hours to $1.07 trillion — close to the psychologically significant $1 trillion threshold — while trading volume rose 78.91% to $60.58 billion.

a bad day for NFTs despite all the high trades

The indices are proxy measures of the performance of the global NFT market. They are operated by CryptoSlam, a sister company of Forkast.News under the umbrella of Forkast.Labs.

The main Forkast 500 NFT index was down 0.37% over the past 24 hours to 2,445.03 as of 10am Hong Kong and was down 2.28% for the week. Forkast’s Ethereum and Solana NFT indices recorded gains, while Polygon and Cardano indices fell.

Wreck League, an NFT video game backed by Hong Kong-based gaming company Animoca Brands, launched its NFT coin on early Friday in Asia. But the collection has failed to deliver and has so far struggled to sell more than a third of its offerings.

“It’s not a good day for NFTs,” said Yehudah Petscher, NFT strategist at Forkast Labs. “If anyone is wondering if traders are running out of liquidity or conviction in the space, this might just be the answer.”

The collection’s struggles will affect the broader market, Petscher added, as merchants will look to Wreck League and lose confidence in other collections’ selling ability.

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Despite Wreck League’s struggles, total NFT trading volume is up 30.97% in the past 24 hours to over $18.69 million, according to data from CryptoSlam. Volumes on the Ethereum and BNB Chain increased, while Solana, Polygon and Cardano blockchains fell.

Daily NFT trades on Thursday surpassed Wednesday’s record to hit another all-time high of over 649,000. Those totals surpassed the previous high of 595,000 logged in on February 25, 2022.

Meanwhile, the average selling price of NFT was US$26.26, about one-tenth of the average price for NFTs on February 25, 2022. That harvest signals “a major change in the NFT ecosystem,” according to Petscher.

“The NFT space is in the midst of a shift in its identity, moving towards high volume, low dollar sales, and this is exactly what NFTs will ultimately lead to mass adoption,” said Petscher.

“However, will this be enough to attract the attention of the general public? I don’t think quite yet, but we’re getting much closer to that with realistic prices and recognizable brands,” he added.

Despite the surge in trades, NFT sellers lost more than $1.91 million in Thursday trading, the biggest loss since July 20.

As NFTs attract more institutional interest, the Singapore branch of McDonald’s Corporation is teaming up with local entertainment company Bandwagon Labs for an NFT project based on the fast food chain’s Grimace character.

The 2,000 Grimace-themed NFTs will go live on August 21. The NFTs can be claimed for free through the McDonald’s mobile app in Singapore, but cannot be transferred to other wallets afterwards.

Of the NFT collections, the Ethereum-based Bored Ape Yacht Club saw the largest 24-hour sales volume. The collection rose 367.71% to over US$2.22 million, while its floor price fell 11% in the past seven days.

Ethereum-based DeGods and Mythos Chain-based DMarket took second and third place in terms of daily sales volumes.

(Updates with NFT section.)

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