Reasons Behind Today Crypto Crash
The crypto market has experienced several crashes in the past, and the most recent Crypto Crash that occurred on June 10, 2023. The crash has affected altcoins and Bitcoin, with prices dropping significantly. The reasons for the crash are not clear, but some analysts suggest that concerns about market liquidity, regulatory clampdown, and fear contributed to the crash.
The SEC suing Binance and its CEO Changpeng Zhao also scared off investors, leading to a further drop in prices. Additionally, rising interest rates, inflation, and a loss of confidence in cryptocurrency investments are some of the factors that have contributed to the cryptocurrency in the past.
Despite the crash, cryptocurrency has survived multiple crashes in its short history, and it is expected to recover in the future. However, investors should proceed with caution when buying the dip, as catching a falling knife can be painful.
What caused the most recent crypto crash
Analysts suggest that factors such as record-high inflation, fear, rising interest rates, and a loss of confidence in cryptocurrencies investments contributed to the crash. Additionally, crypto prices can be dramatically affected by major events such as exchanges or coins crashing, lack of liquidity in cryptocurrency markets, regulatory factors, and financial enforcement actions like those carried out by the SEC.
The weak sentiment spread across the crypto market resulted in investors withdrawing their money, causing Tether (USDT) to lose its peg to the dollar. The collapse of several large cryptocurrency “banks” and hedge funds also contributed to the crash.
Long positions liquidations in today crypto crashing
Today crypto liquidation soared over $200 million in an hour. In a previous crash that occurred in March 2023, cryptocurrency traders suffered over $300 million of losses in liquidations amid the market crash.
In another crash that occurred in May 2022, more than $300 billion was wiped out by a crash in cryptocurrency prices since Monday. However, it is important to note that the amount of liquidations during a crypto crash can vary depending on the severity and duration of the crashing.
