The two largest cryptocurrencies, Bitcoin and Ethereum, continued to decline during today’s trading, amid a wave of liquidation driven by leverage.
Bitcoin fell 5.53% in 24 hours to $59,441 at the time of writing, while Ethereum lost 7.66% of its value to $2,480.
“Cryptocurrency markets have moved sharply, leading to leveraged liquidation,” CNBC quoted Stephen Lupka, head of private clients and family offices at Swan Bitcoin, as saying. “This move appears to have started with a significant decline by Ethereum, which has been struggling all year against Bitcoin.”
Leverage means using debt financing to finance investment in assets to increase profits.
According to Coinglass, the futures market saw $93.52 million in long Ether liquidations, which force traders to sell their assets at market price to settle their debts, via centralized exchanges, and $85.93 million in Bitcoin liquidations.
Buying opportunity
“Leveraged liquidations are usually great buying opportunities,” Lupka added. “I expect buy orders to flood into Bitcoin, and Ethereum may continue to falter until investors have a reason to be positive about the asset again.”
August was a quiet month for cryptocurrencies and risk assets in general, which have been particularly volatile this year.
Overall, Bitcoin is up 41% since the beginning of the year while Ethereum remains up 8.5%.
The combined market cap of cryptocurrencies fell 5.52% in a year to $2.08 trillion, according to CoinMarketCap.
Ton Queen
In another context, the cryptocurrency community platform (TON), linked to the social media platform Telegram, said that the currency mining network was disrupted on Wednesday due to developments related to the launch of a new currency.
Cryptocurrency community platform TON Tonk Inu wrote on its X platform that no new units of the cryptocurrency have been mined since dawn on Wednesday.
The community blamed the cryptocurrency mining outage on the hype surrounding the launch of a new Mimicoin coin, called Dogecoin.
Meanwhile, cryptocurrency exchange Bybits said it has suspended all deposits and withdrawals on TON until the network is back to normal.
The new meme coin, which has already been listed on major exchanges like Binance and OKX, has seen a surge in trading volume of $1.7 billion within the first 10 hours of launch, and has impacted the entry of cryptocurrency platforms like TON.
Mimicoin peaked at $0.0018 immediately after launch on Tuesday, and has since fallen to around $0.0013 in early trading on Wednesday, according to data.
The outage also comes as French authorities have arrested Pavel Durov, founder of Telegram, the platform behind the TON cryptocurrency, on charges of misinformation and inciting chaos by “spreading inaccurate information.”
The price of the TON unit fell by 20% in the first hours of Durov’s arrest, before the decline narrowed to 16% in early trading on Wednesday, compared to trading before the arrest of the Telegram founder.
