In a dramatic turn of events, Bitcoin and Ether prices experienced significant declines on April 12, sending shockwaves through the cryptocurrency market. Bitcoin, the leading cryptocurrency by market capitalization, saw its price plummet by 5%, falling from $68,341 to a low of $65,110 within a mere hour during the late trading session in New York. This sudden drop mirrored a broader trend in the crypto market, with Ether, the second-largest cryptocurrency, also taking a steep dive. Starting the day at $3,553, Ether’s price dropped by 8%, eventually stabilizing around $3,226.
The precipitous declines in these major cryptocurrencies were reflected across various trading platforms, with Coinglass reporting over $417 million in leveraged positions being wiped out in just one hour. The futures market data indicated that Bitcoin and Ether longs were particularly hard hit, accounting for substantial portions of the liquidations. On the cryptocurrency exchange Binance alone, short and long liquidations totaled $171 million, while traders on the crypto exchange OKX suffered combined losses of $158 million. Over the past 24 hours, the total market liquidations have reached an astounding $860 million, affecting nearly 271,000 traders.
This sudden market downturn coincided with a dip in U.S. stock markets, which reacted negatively to new data indicating a third consecutive month of accelerating inflation. The higher-than-expected Consumer Price Index (CPI) figures have dampened expectations for imminent Federal Reserve rate cuts, compounding fears that efforts to control rising prices may be faltering. Jamie Dimon, CEO of JPMorgan Chase, highlighted the severity of the situation in his comments on April 12. During the announcement of first-quarter earnings results, Dimon pointed to “persistent” inflation and geopolitical tensions as major threats to an otherwise positive economic outlook. He also noted the unprecedented scale of the Federal Reserve’s quantitative tightening, suggesting that the full impact of these measures on the market has yet to be seen and warning of ongoing inflationary pressures.
The ramifications of these developments are profound, signaling a potentially turbulent period for the cryptocurrency market. Investors and traders alike are now forced to navigate a landscape marked by heightened volatility and uncertainty, underscored by the swift and severe reactions of both crypto and traditional financial markets to macroeconomic indicators.
