The cryptocurrency market is facing extreme volatility as total liquidations surpassed $1.4 billion within 24 hours, sparking concerns among traders. Many investors on X (Twitter) have accused exchanges of manipulating the market by capping long liquidations.
The sudden crash followed a statement from former U.S. President Donald Trump, in which he confirmed that tariffs on imports from Canada and Mexico would resume next month, reigniting inflation concerns.
Massive Liquidations Trigger Market-Wide Panic
According to data from Coinglass, 367,789 traders had their positions liquidated over the past 24 hours. The largest single liquidation order took place on Binance, where a BTCUSDT transaction worth $20.80 million was wiped out.
Long liquidations dominated the market, totalling around $1.24 billion, significantly outpacing short liquidations, which stood at $96.4 million.
The overall crypto market saw a steep decline of about 8%, dropping from a total market capitalization of $3.31 trillion to approximately $2.9 trillion. Bitcoin fell below $95,000 and continued its downward slide to around $92,000.
Meanwhile, Ethereum suffered a sharp 10% decline, hitting $2,424.1. The downturn also affected major altcoins, further shaking investor confidence.
Trump’s Tariff Announcement Adds Fuel to the Fire
The sell-off was triggered by Trump’s recent statement confirming the reimplementation of tariffs on imports from Canada and Mexico.
The move comes after a brief one-month pause and has renewed concerns about inflation. Investors fear that trade restrictions could impact global markets, further tightening financial conditions.
Market analysts suggest that this policy change is a significant factor behind the sudden crash, as uncertainty over inflation tends to create volatility across asset classes, including cryptocurrencies.
The timing of the announcement led many traders to believe that market makers and exchanges took advantage of the news to trigger liquidations.
Exchanges Face Scrutiny Over Alleged Manipulation
The sharp downturn has reignited debates over market manipulation, with traders on X accusing exchanges of deliberately targeting long positions. Many believe that exchanges ‘cap’ liquidations to maximize their profits, an accusation that has surfaced multiple times during past market crashes.
Adding to the turmoil, Bybit, which recently suffered a $1.4 billion hack, accounted for a large portion of the liquidations. The exchange has just begun to recover from the security breach, and its involvement in these liquidations has raised further suspicions among traders.
Understanding Long Liquidations
Long liquidations occur when traders who bet on price increases are forced to exit their positions due to falling prices. When an asset’s price drops below a certain threshold, exchanges automatically close these positions to prevent further losses.
Given the scale of the recent downturn, many traders were caught off guard, leading to widespread liquidations.
The current crypto market crash underscores the fragile nature of digital assets in response to external economic policies. While inflation concerns and trade tensions continue to fuel uncertainty, traders must remain cautious in the face of heightened volatility.
Also Read: Crypto Trader Loses $18.6M in Series of ETH, WBTC Trades, $51M Bitcoin Position Faces Liquidation