The cryptocurrency market witnessed a sharp correction on June 11th, with Bitcoin (BTC) dropping 2.5% and Ether (ETH) experiencing an even steeper decline of 2.58%. This downturn triggered a wave of liquidations in leveraged trades, wiping out nearly $200 million from unfortunate investors.
Data from CoinGlass paints a grim picture, revealing that over 83,900 traders were liquidated in the past 24 hours, with total losses reaching a staggering $190.97 million. Notably, the largest single liquidation order, a whopping $5.21 million ETH/USDT swap, occurred on the OKX exchange.
Leveraged trading amplifies both profits and losses. When traders fail to maintain minimum margin requirements (essentially a deposit to secure leveraged positions), exchanges automatically liquidate their holdings to cover the debt. This often results in a partial or complete loss of the initial investment.
Bitcoin(BTC) traders bore the brunt of these liquidations, with a total of $46.9 million wiped out. Interestingly, the majority ($36.8 million) were long positions, indicating traders who bet on a price increase. Ether followed closely with $41 million in liquidations, with a similar pattern of predominantly long positions ($31.3 million).
This bloodbath comes hot on the heels of a $400 million liquidation event on June 7th. Experts attribute the recent turmoil to two key factors: the upcoming May Consumer Price Index (CPI) report and the Federal Open Market Committee (FOMC) meeting scheduled for June 12th.
Historically, these events have triggered significant volatility in the crypto market. As investors seek to minimize risk, the correlation between crypto and traditional equities tends to rise. Currently, the 30-day correlation between the two markets is at its highest since 2022, highlighting heightened risk aversion.
CPI reports track inflation, a key economic indicator. Historically, rising inflation leads to a decline in Bitcoin’s(BTC) price, as investors have less disposable income for riskier assets like crypto. The upcoming CPI report is expected to show inflation hovering between 0.1% and 0.3%.
On the other hand, the FOMC meeting could impact crypto through potential interest rate hikes. While the current expectation is for the benchmark rate to remain unchanged (5.25%–5.50%), any deviation could trigger a market reaction.
The next 24 hours will be crucial for the crypto market. The outcome of the FOMC meeting and the CPI report will likely dictate the short-term direction of Bitcoin, Ether, and other digital assets.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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