The cryptocurrency market has plunged into chaos this week with high liquidation, liquidating over $110 billion in short and long positions over the past 24 hours as Bitcoin and major altcoins dipped to multi week lows.
According to data from Conglass, long positions saw the highest liquidations with about $1.24 billion while short traders lost a relatively small 94.88 million.
Bybit Hack Fuels Liquidation
The market downturn was partly influenced by U.S. President Donald Trump confirming plans to reinstate 25% tariffs on imports from Canada and Mexico. The news reignited fears of renewed trade wars and inflationary pressures.
Meanwhile, Bitcoin and Ethereum exchange-traded funds faced massive outflows contributing further to the downturn. About $1.14 billion and $85.3 million exited Bitcoin ETFs and Ethereum ETFs respectively, over two weeks, Coinglass reports. These withdrawals—the largest since the ETFs launched—resulted in significant selling pressure.
Additionally, the crypto community is still dealing with the fallout from the $1.4 billion Bybit hack on February 21. The breach—the highest crypto breach ever recorded—resulted in a brief loss of investor confidence, pushing massive selloffs of crypto holdings especially ETH and contributing to a surge in forced liquidations.
Memecoin Meltdown Deepens Crisis
Memecoins, especially those on the Solana network, further worsened the market collapse. The controversy from memecoin $Libra was a significant cause of Solana’s recline with $SOL down by over 20% and trading at $138 according to CoinMarketCap.
Additionally Coins like $TRUMP plunged over 75% from its peak, putting many holders in significant losses. In general, the broader Solana ecosystem has lost over $50 billion in market value amid the controversies and insider trading allegations.
Despite the turmoil, historical patterns offer a glimmer of hope. During Bitcoin’s 2017 bull run, the asset survived five major corrections ranging from 28% to 39% before reaching new highs.
The Crypto Fear & Greed Index for Bitcoin plummeted from 49 (Neutral) to 25 (Extreme Fear) in 24 hours, projecting reduced investor confidence.
However despite the bearish sentiments, technical indicators hint at a rebound very soon with analysts suggesting a rally toward $98,000 could follow if bullish momentum resumes. This could further push the general crypto market into a much anticipated bull run.
