The broader crypto market is once again taking a heavy beating as Bitcoin, Ethereum and their fellow digital currencies are painting their charts in red.
Bitcoin was hit the hardest this time as its price correction led to a fall below the $20K marker. According to tracking from Coingecko, at the time of writing, BTC is trading at $19,770.
Ethereum decreased by 5.4% over the last 24 hours and has fallen below the $1,500 range, changing hands at $1,486.
BTC’s market cap was also heavily affected by this correction phase, plunging to more than $379 billion after soaring all the way to $410 billion just few days ago.
Overall, the crypto market lost 3.8% of its overall valuation which now stands at $1.03 trillion.
This development ended the rally that gave hopes to investors that the crypto winter has finally ended and that digital currencies are already on their way to their respective recoveries.
Crypto Market Struggle Causes Almost $400 Million Liquidations
Following the momentum-changing collapse of Bitcoin and altcoin king Ethereum, long and short positions in crypto trading were liquidated, resulting in losses of $360 million.
But while this comes as bad news for the crypto market, investors might welcome this as a positive development as it could mean stabilization of the market, giving them more confidence in their participation right now.
Altcoins Dogecoin and Shiba Inu, known for being greatly affected by the so called “Elon Musk Effect,” are also feeling the pressure after riding the momentum of the billionaire’s completed purchase of Twitter.
DOGE lost almost 12% of its value over the last 24 hours while SHIB is down by 8.1% during the same timeframe. XRP also wasn’t spared as it decreased by 6.1%.
Although most of the charts are in red, cryptocurrencies remain as assets to be reckoned with as they still possess a combined market cap of nearly $1 trillion.
What’s Causing The Decline?
One factor that was identified responsible for putting the crypto market on edge once again is the drama involving the FTX exchange platform and Binance.
It can be recalled that Binance CEO Changpeng Zhao announced his company decided to sell all of its holdings of FTT tokens – the native cryptocurrency of FTX led by Sam Bankman-Fried.
Shortly after, Alameda Research, a trading house owned by Bankman-Fried, offered to buy the tokens at $22 per unit.
This came after Zhao and the FTX owner engaged in a series of unpleasant Twitter exchanges that touched subjects such as lobbying for US politicians and frontrunning trades.
The decision of the Binance CEO sent shockwaves to the overall Bitcoin market that ultimately led to decline in prices of Bitcoin, Ethereum and many other cryptocurrencies.
Meanwhile, below is a video of the next Bitcoin bubble for more information on the current state of the digital currency.