The global crypto market has seen what might be its worst decline in more than two and a half years. According to CoinMarketCap data, the total market capitalization shed more than 15% of its value over the past 24 hours to hit approximately $1.82 trillion.
This unexpected fall has led to a widespread panic within the broader digital assets space, causing more volatility and leaving virtually all cryptocurrencies bleeding in the red zone.
Massive Liquidations and Negative Funding Rates Signal Bigger Blows for The Crypto Market
The times are particularly worrisome, and the reality on ground is highlighted in CoinGlass’ data. This data details 322,698 traders as having already been liquidated from their positions over this period.
As expected, these forced liquidations have directly affected several centralized exchanges, with total losses already running into $1.24 billion as of publication.
Another noticeable development is that Bitcoin’s perpetual futures funding rate has also turned negative, adding to the uncertainty on the ground. This means that there might be a growing demand for short positions. That is, as traders continue to bet on Bitcoin’s price going further down. At least, for the time being.
Negative funding rates often reflect a bearish sentiment in the market. In times of uncertainties such as this, when there is a sudden drop in market cap and a significant number of liquidations, investor confidence is usually on the extreme low. This makes room for more panic selling as traders and investors look to do away with riskier assets.
Looking Ahead
Presently, things are not looking very bright for the global crypto market. However, it is not exactly charting a course that it has never before taken. That is especially true, given that the crypto market is almost synonymous with volatility and nothing is given in this terrain.
Essentially, the focus remains on potential recovery strategies as market participants adjust their strategies in response to the rapidly changing conditions.
