The crypto market witnessed a major selloff on Friday, the first expiry of March. Within just 45 minutes, the global crypto market cap fell over 5%. The total liquidation crosses $250 million in the last 24 hours.
Bitcoin price made a 24-hour low and high of $22,241 and $23,540, respectively. Thus, the BTC price fell nearly 6% in the last 24 hours. Meanwhile, Ethereum price fell over 5%, making a 24-hour low and high of $1,553 and $1,652, respectively.
While there’s pressure due to fears of a 50 bps rate hike in March by the U.S. Federal Reserve due to rising inflation, the macro is not the reason behind the crypto dump today. The US Dollar Index (DXY) is indeed falling in the last 24hrs, favoring a rise in crypto prices.
Reasons Behind the Crypto Market Dump Today
Bitcoin early Friday’s selloff happened primarily due to concerns about crypto-focused bank Silvergate as major crypto firms including Coinbase, MicroStrategy, and Circle distanced from the bank, and the stock price fell over 50%.
Another major reason is Mt. Gox Bitcoin unlock worth billions. Mt. Gox creditors are expected to receive early repayments from March 10 as the window for repayments is set to open.
According to Coinglass data, $205 million crypto longs were liquidated today, with liquidations of $72.91 million Bitcoin longs and $40 million Ethereum longs.
Lookonchain in a tweet on March 3 speculated that the liquidation seen today is likely associated with a fund. Before the liquidation, a fund withdrew $312 million USDC from issuer Circle and transferred it to crypto exchanges.
Moreover, the fund transfers happened after Coinbase tweeted that it would no longer accept or initiate payments with Silvergate bank. After a brief pause, the fund again withdrew 10 million USDC from Circle and transferred to exchanges. As per the on-chain data, the timings of transfers are suspicious.
Another Decline Coming?
Furthermore, the on-chain data reveals the crypto market will witness another decline. Bitcoin on-chain data shows an increase in selling pressure by short-term holders. Exchange inflow by 1-3 months holders reached its highest value since June 2022.
Moreover, stablecoins outflow from exchanges is increasing, indicating a further decrease in prices. The technical charts of Bitcoin and Ethereum are also showing bearish or pre-bearish signals.
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