Connect with us
DAPA Banner

Crypto World

What Triggered the Latest Bitcoin and Altcoin Crash?

Published

on

What Triggered the Latest Bitcoin and Altcoin Crash?


Analysts explain what took place in the crypto markets in the past 24 hours or so, and whether the worst is behind us.

It’s safe to say that this is no longer a bull phase. After all, BTC dumped by more than 50% since its October all-time high and plummeted to around $60,000 late on Thursday.

But in this article, we will focus more on the events that took place yesterday than on the overall decline over the past several months. In the span of just 24 hours, the cryptocurrency plummeted from $77,000 to $60,000 in one of its worst single-day trading performances since its inception.

Advertisement

Multiple altcoins registered even more profound losses of up to 20%, as was the case with XRP. The total value of wrecked positions in just one day shot up to $2.6 billion, according to Coinglass data. Nearly 600,000 traders were liquidated.

Despite bouncing off local lows, BTC and the altcoins erased months and years of gains, returning to levels last seen before the US presidential elections at the end of 2024. During and after similar calamities, the most obvious question is why. Here’s a breakdown through the eyes of the Kobeissi Letter.

What Happened?

First things first, the analyst reassured that although bitcoin has plummeted by over $30,000 in the past couple of months, the “fundamental picture for crypto” has remained “vastly unchanged.” They added that the answer to why the asset class is tanking lies in the October 10 crash, when over $19 billion in leveraged positions were wiped out. They believe “something structural” changed on that day.

Although BTC remained entirely rangebound for two months between November 15 and January 15, the analysts said there were brief periods of liquidation with “gaps” in both directions, which were another sign of the market’s structural collapse. They noted that sentiment is “all that matters” during crypto cycles, and it was broken after the October crash.

Advertisement

You may also like:

“The result is a massive virtuous cycle, shifting from liquidations to sentiment deterioration, and back. Since January 24th, we have seen $10 billion worth of levered positions liquidated. That’s ~55% of the record amount seen on October 10th. It’s a structural decline.”

The analysts offered more evidence showing the nature of the structural collapse, including the spread of selling pressure into other asset classes, and that BTC’s market depth, the capital available to absorb large orders, is still more than 30% below its October peak. The latest time it hit such numbers was after the FTX crash in 2022.

Lastly, the Kobeissi Letter indicated that a large player, perhaps an institution, sold or was liquidated during the violent trading session, given BTC’s rapid and massive correction.

When Bottom?

The second popular question after a crypto market collapse is whether we have bottomed out or if there is more pain ahead. The analysts answered that bitcoin would bottom once “structural liquidity is restored.”

“This will be a combination of both capitulation in price and leverage, as well as maximum bearish sentiment.”

The good news is that they added, “we seem to be somewhat near that point.”

SPECIAL OFFER (Exclusive)

SECRET PARTNERSHIP BONUS for CryptoPotato readers: Use this link to register and unlock $1,500 in exclusive BingX Exchange rewards (limited time offer).

Advertisement

Source link

Continue Reading
Click to comment

You must be logged in to post a comment Login

Leave a Reply

Crypto World

Oil Rose 3% to Open the Week: Here’s What Moved the Market on Monday

Published

on

Oil prices jumped more than 3% on Monday, pushing Brent crude above $116 a barrel. West Texas Intermediate (WTI), the US benchmark, climbed to roughly $102 per barrel.

The latest rise comes as the US-Israel war on Iran entered its fifth week with no signs of abating.

Oil Extends Its War-Fueled Rally 

Several escalatory developments over the weekend fueled the surge. President Donald Trump told the Financial Times he could possibly seize Kharg Island, the terminal that handles roughly 90% of Iran’s crude exports.

Follow us on X to get the latest news as it happens

Advertisement

The US president struck a mixed tone on diplomacy with Iran, saying he was “pretty sure” of making a deal with Iran but conceding that talks could still collapse.

Meanwhile, Iran’s parliament speaker warned that Tehran would “set them on fire” when American forces arrived and promised consequences for US-allied nations in the region. 

The oil price surge is far from over, according to market analysts, who warn that the prolonged closure of the Strait of Hormuz could drive crude even higher.

Advertisement

“A scenario in which the Strait remains closed for an additional month would be consistent with oil prices rising towards $150/bbl and constraints on industrial consumers of energy supply,” Bruce Kasman, global head of economics at JPMorgan, said.

According to Bloomberg, US officials and Wall Street analysts have also begun discussing the possibility of crude reaching $200 per barrel.

Subscribe to our YouTube channel to watch leaders and journalists provide expert insights

Asian Stocks Tumble, Crypto Feels the Pressure

The energy shock rippled across Asia. Google Finance data showed that Japan’s Nikkei 225 fell over 4.5%, while South Korea’s KOSPI dropped more than 4.3% as import-dependent economies repriced risk.

The volatility has spread to crypto markets, with asset prices dipping early in the morning before rebounding. 

Advertisement

“The market briefly crashed just now — ETH dropped below $1,940 and BTC fell below $65,000,” Lookonchain reported.

Oil above $100 per barrel continues to pressure risk assets by fueling inflation expectations and delaying anticipated Federal Reserve rate cuts.

The post Oil Rose 3% to Open the Week: Here’s What Moved the Market on Monday appeared first on BeInCrypto.

Advertisement

Source link

Continue Reading

Crypto World

Lido DAO Mulls $20M LDO Buyback to Boost Token Price

Published

on

Lido DAO Mulls $20M LDO Buyback to Boost Token Price

Lido’s decentralized autonomous organization is considering a one-off $20 million buyback of its governance token to address so-called price dislocation, which is at “historically depressed levels” relative to Ether, according to the DAO. 

The proposal, submitted Friday, seeks permission to swap 10,000 Lido Staked Ether (stETH) tokens, currently worth $20 million from the DAO’s treasury for Lido DAO (LDO), arguing that LDO is undervalued.

“This is not a routine fluctuation. It represents one of the most significant dislocations between LDO’s market price and its underlying protocol fundamentals in the token’s history.”

A token buyback of this size could boost the price of the token, which has fallen roughly 96% from its all-time high. In November, a Lido DAO member pitched an automated buyback mechanism for LDO to improve the token’s price. However, that proposal hasn’t been implemented.

LDO’s change in price relative to ETH since 2024. Source: Lido DAO

Lido DAO pointed out that LDO is trading at a steep discount to Ether (ETH) at a ratio of 0.00016, roughly 63% below its two-year median.

This is despite the protocol holding the top spot of the Ethereum liquid staking market, with a 23.2% share of staked Ether, according to Dune Analytics data. The protocol’s dominance has even been flagged as a centralization risk to the network in previous years.

Advertisement
Share of Ethereum network validators. Source: Dune Analytics

Related: Ethereum builders propose ‘economic zone’ to tackle L2 fragmentation 

LDO is currently trading at $0.30, down 95.9% from its $7.30 high set in August 2021, according to CoinGecko data. LDO’s $255 million market cap makes it the 141st largest token by value at the time of writing.

“That dislocation is not justified by a proportional deterioration in protocol performance,” Lido DAO said. 

Lido DAO proposes buying stETH in batches

Lido DAO proposed buying up to 10,000 stETH in smaller batches of 1,000 to buy LDO. 

Lido DAO said it would use limit orders or adopt a dollar-cost averaging strategy to avoid market volatility. 

Advertisement