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The crypto market is hit by a new wave of turmoil. In just 24 hours, nearly 760 million dollars have been liquidated, including 200 million in just one hour. This brutal movement, a symptom of a constantly bubbling market, reflects the vulnerability of leveraged positions in the face of sudden price fluctuations. At the same time, this situation highlights the significant challenges that investors must face, balancing risk management and exacerbated volatility.
An Unprecedented Wave of Liquidations
In the last 24 hours, the crypto market has been shaken by a series of massive liquidations, plunging trading platforms into unprecedented chaos. According to data published by Cointelegraph on December 9, 2024, on social network X (formerly Twitter), “nearly 760 million dollars were liquidated during this period, with a peak of 200 million dollars in one hour.” These figures, revealing the brutality of the events, reflect a deep imbalance caused by a rapid price drop across several major assets.
The most affected assets include Bitcoin and Ethereum, often regarded as the pillars of the crypto ecosystem. Thus, traders who had taken on positions with high leverage were unable to cover their margin calls, triggering a cascade of forced sales. This mechanism, already well-known in such volatile markets, intensified the drop in prices. Moreover, this decline in prices creates a domino effect that has heightened volatility and reinforced a climate of panic among investors. This episode once again highlights the risks associated with leveraged positions in a market where every movement can have systemic repercussions.
Underlying Causes and Their Implications
The collapse observed in recent hours has its roots in a combination of macroeconomic factors and internal elements specific to the crypto market. Indeed, recent data suggests that unexpected economic announcements, such as the rise in U.S. bond yields, have heightened investors’ nerves in the financial markets. In this context, riskier assets, including cryptos, have undergone a wave of selling that has amplified overall volatility.
Moreover, movements orchestrated by major players, often referred to as “whales,” have exacerbated the situation. These large entities are said to have liquidated significant positions, adding extra pressure on prices and contributing to a domino effect. Such a situation raises questions about the crypto market’s capacity to withstand such manipulations, particularly in the absence of robust regulations. More broadly, these events highlight the structural fragility of this ecosystem in the face of external shocks and the strategic behaviors of the most influential players.
This situation sheds further light on the vulnerability of cryptos to external shocks, in a global financial environment marked by uncertainty. For investors, these losses underscore the urgent need to develop more robust risk management strategies capable of cushioning the impacts of sudden market fluctuations. Furthermore, this situation could prompt regulators to intensify their efforts to establish an appropriate regulatory framework. Such a framework would aim to enhance transparency and the stability of exchanges, and limit the influence of potential manipulations by whales. In this context, the crypto ecosystem will need to adapt, as well as demonstrate its resilience to gain credibility with institutional and retail investors.
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Diplômé de Sciences Po Toulouse et titulaire d’une certification consultant blockchain délivrée par Alyra, j’ai rejoint l’aventure Cointribune en 2019.
Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l’économie, j’ai pris l’engagement de sensibiliser et d’informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu’elle offre. Je m’efforce chaque jour de fournir une analyse objective de l’actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
