Over $1 billion in crypto market liquidations as Bitcoin hits 2-month low – Crypto News

After bottoming out at a two-month low of around US$25,400, Bitcoin recovered some losses on Thursday morning in Asia to trade around US$26,800. Ether also fell dramatically to a low of around US$1,550 before rebounding to just under the US$1,700 line. All other top 10 non-stablecoin cryptos logged losses as macroeconomic factors — including the depreciation of the Chinese yuan and the bankruptcy of Chinese property giant Evergrande — hit investor sentiment. Overall, investors liquidated $1 billion in cryptocurrencies, driving the total market capitalization to the edge of the psychologically important US$1 trillion threshold. 

XRP led the losers, after a U.S. judge granted the U.S. Securities and Exchange Commission (SEC) approval to file a motion to appeal the recent favorable ruling for Ripple Labs regarding retail sales of token XRP. Meanwhile, the Forkast 500 NFT index dropped but a rise in transactions continued. U.S. stock futures steadied after Wall Street closed lower on Thursday. The release of minutes from the Federal Reserve’s July meeting continues to fuel concerns of more monetary tightening ahead

Bitcoin, Ether slide after giving up key support levels

Bitcoin slid 7.02% in the last 24 hours to US$26,819.27 as of 07:20 a.m. in Hong Kong, logging a weekly loss of 8.88%, according to CoinMarketCap data. The world’s leading cryptocurrency hit a two-month low of US$25,409.11 on early Friday morning.

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

“Realized volatility had hit 18%; the last time volatility was this low, in November 2018, Bitcoin’s 30-day realized volatility spiked to over 100% as prices crashed by 46%. In Bitcoin, sharp price declines have often followed low volatility periods. We are not predicting such a significant decline but expected, at least, a -13% decline (so far, prices are down -10%).”

There is also the looming shadow of macro risks to consider, added Thielen.

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

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

“This is really a past event (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 dropped 5.64% to US$1,706.22 and lost 7.80% for the past seven days, after reaching a five-month low of US$1,551.71 on early Friday morning.

Other top 10 non-stablecoin cryptocurrencies all traded lower.

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

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

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

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

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

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

The total crypto market capitalization dropped 5.69% in the past 24 hours to US$1.07 trillion — close to the psychologically important US$1 trillion threshold — while trading volume surged 78.91% to US$60.58 billion.