Cryptocurrency market capitalization registers largest daily drop since 2022

Quick Take

  • The decline in the cryptocurrency market cap over the past 24 hours is the largest daily downturn since January 2022.
  • The bitcoin perpetual futures funding rate turned negative over the past 24 hours — reflecting market participants leaning towards short positions.

The global cryptocurrency market has experienced a significant downturn as escalating tensions in the Middle East and worries about the global economy's strength appear to erode investor confidence.

According to Coingecko data, the cryptocurrency market capitalization has plummeted to $1.94 trillion — a drop of over 13% in the last 24 hours. TradingView charts show that today's decline in the crypto market cap is the largest daily downturn since January 2022.

Multiple-year cryptocurrency market capitalization charts shows the significance of the downturn over the past 24 hours. Image: TradingView.

In the past 24 hours, a total of 280,093 traders were liquidated — with the total liquidations across centralized exchanges amounting to $1.07 billion — according to data from Coinglass.

Bitcoin led the cryptocurrency market in liquidations, with over $362 million liquidated in the past 24 hours. Of these, approximately $302 million were long positions as BTC dropped nearly 13% to $52,847 at the time of publication, according to The Block’s Bitcoin Price Page. The GM 30 Index, representing a selection of the top 30 cryptocurrencies, increased 18.64% to 95.79 in the same period.

The price decline occurred after the largest digital asset by market cap touched its one-year moving average. According to an X.com post by Trendstorm founder and CEO Philip Swift, "bull runs operate when the price is above the one-year moving average."

Bitcoin touched its one-year moving average over the past 24 hours. Image: TradingView.

Ethereum also faced significant liquidations, with $346 million liquidated, of which $297 million were long positions, the data showed. The price of ether fell over 20% in the last 24 hours to $2,321, according to The Block's price page.

Liquidations happen when an exchange forcibly closes a trader's leveraged position due to the partial or complete loss of the trader's initial margin. This occurs when a trader fails to meet the margin requirements for their leveraged position, meaning they lack sufficient funds to maintain the trade.

On-chain liquidations across decentralized finance protocols on Ethereum have reached a new yearly high, with a total of over $350 million in liquidated positions in the past 24 hours, according to data from analytics firm Parsec Finance.

The majority of these liquidations were concentrated in three major assets, affecting lending protocols. Ether collateral faced the brunt of the liquidations, amounting to $216 million over the past day. Wrapped staked ether followed, with liquidations totaling $97 million, and wrapped bitcoin also saw significant liquidations, totaling $35 million.

Perpetual futures funding rate turns negative

Over the past 24 hours, the bitcoin futures funding rate turned negative — suggesting a higher demand for short positions and indicating that traders are betting on the bitcoin price to decline.

Funding rates turned negative over the past 24 hours. Image: Coinglass.

Cryptocurrency markets started to decline last week, influenced by geopolitical tensions in the Middle East and underwhelming earnings reports from tech companies. These factors dampened investor excitement for artificial intelligence and led to a shift away from risk assets. As an example of how the risk-off sentiment has carried into this week, pre-market trading today shows Apple down 6%, Nvidia down 8%, and both Microsoft and Google down 4.5%.

Monday's market slump has been intensified by the yen surging to a seven-month high, driven by increasing expectations of further rate hikes by the Bank of Japan. Today, the Tokyo Stock Price Index has recorded its steepest drop since 2011.


Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Brian McGleenon is a UK-based markets reporter for The Block. He has worked as a financial journalist and producer for multiple news outlets over the years, such as Fuji Television, The Independent, Yahoo Finance, The Evening Standard, and The Daily Express. Brian is also a screenwriter and producer with one feature film produced and one in development with Northern Ireland Screen. Apart from web3 and cryptocurrency developments, he is also interested in geopolitics, environmental issues, artificial intelligence, and longevity research. Get in touch via email [email protected].

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