The crypto market has experienced $143 million in liquidations in the last 24 hours: ETH and BTC have sharply declined.

The crypto assets market experienced severe fluctuations, with a total liquidation amount of 143 million USD across the network within 24 hours, of which short orders accounted for 106 million USD, or 74% of the total, while long orders faced liquidations of 37.0985 million USD. Ethereum (ETH) and Bitcoin (BTC) ranked as the top two in the liquidation list, recording liquidation amounts of 32.41 million USD and 13.55 million USD, respectively, highlighting the market's extreme sensitivity to price fluctuations of major assets.

short order dominates, market sentiment is under pressure

On August 2, the price of Bitcoin briefly fell below $112,000, reaching a two-week low, and then rebounded to $119,000, with a fluctuation of over 6% within 24 hours. The price of Ether dropped from $3,634 to $3,517, and this liquidation is closely related to recent market fluctuations. The high rate of short order liquidations indicates that many investors bet on further price declines, but the rapid market rebound led to the liquidation of high-leverage short positions.

Market fluctuations caused by the Fed's hawkish stance and non-farm data

The Federal Reserve's decision on July 31 is the macro catalyst for this Get Liquidated. The Federal Open Market Committee (FOMC) voted 10 to 2 to maintain the interest rate at 4.25%-4.50%, with Vice Chair Bowman and Governor Waller casting dissenting votes in favor of a 25 basis point cut. Chair Powell exhibited a hawkish stance at the press conference, emphasizing the resilience of the labor market and inflation risks, stating that the decision on interest rate cuts in September will depend on data from August and September. This statement caused the US Dollar Index (DXY) to rise to 100, putting pressure on risk assets.

The non-farm payroll data for July released on August 1st further intensified market fluctuations. The actual increase in employment was 73,000, lower than the market expectation of 110,000; the unemployment rate rose to 4.2%, in line with expectations. Although the data did not significantly deviate from expectations, concerns about a slowdown in the labor market have pushed up expectations for interest rate cuts, with the probability of a 25 basis point cut in September rising to 80.5% as of the time of writing.

The asset dynamics behind liquidation

ETH: The $32.26 million liquidation amount of Ethereum reflects its high Fluctuation and high leverage trading activity. On August 2, Ethereum's price fluctuated between $3500 and $3600, with a 24-hour trading volume of $18 billion. On-chain data shows that Ethereum whale addresses accumulated about 12,000 ETH (approximately $45 million) during the downturn, indicating institutional investors buying the dip. However, high leverage derivatives trading (with perpetual contract leverage rates up to 50 times) led to concentrated liquidations of short orders, especially on Binance and Bybit. Recently, Ethereum has been supported by the RWA (Real World Asset Tokenization) sector's boom, with the RWA sector rising 3.69% on August 3, but macro pressures have limited its upside potential.

BTC: Bitcoin Get Liquidated 13.53 million USD, the scale is lower than Ethereum, but still significant. After the price fell below 112,000 USD, it quickly rebounded, triggering short order liquidation. On-chain analysis shows that Bitcoin OTC balance has decreased, and whale buying is active, indicating that institutions still have confidence in long-term value. However, the Fed's hawkish decision and the strengthening of the US dollar have weakened short-term upward momentum. Market predictions suggest that if Bitcoin falls below the 110,000 USD support, it may further test 105,000 USD.

Macroeconomics and on-chain signals intertwine

The recent liquidation event was driven by multiple factors:

1 Federal Reserve's hawkish stance: Powell's "data-driven" remarks and the uncertainty of a rate cut in September have heightened market volatility. High-leverage traders failed to adjust their positions in a timely manner during the rapid price rebound, leading to large-scale liquidations.

2 Non-Farm Payroll Expectations: The mild performance of the July non-farm data (110,000 new jobs, 4.2% unemployment rate) did not trigger recession fears, but market concerns over labor slowdown still pushed up volatility.

3 Trump's Tariff Policy: Powell mentioned that tariffs could bring about a "one-time price shock," which has intensified speculative behavior in the derivatives market due to diverging expectations of inflation.

4 On-chain Dynamics: High-leverage derivatives trading is the main reason for getting liquidated. Data shows that on August 2, the total open interest in the crypto market reached $60 billion, with an average leverage ratio of 20 times, and some perpetual contracts as high as 50 times. The rapid price rebound triggered forced liquidations, particularly severe losses for short orders.

Market Outlook and Investment Strategies

Short-term risk:

Volatility remains high: The inflation and employment data for August and September will determine the direction of the Federal Reserve's September decision. If the data shows a rebound in inflation or strong employment, Bitcoin and Ethereum may come under further pressure, testing support levels of $110,000 and $3,500.

Liquidity Risk: The depth liquidity of Ethereum and Bitcoin is $120 million and $200 million respectively, lower than that of the stock market, which may amplify price Fluctuation.

Regulatory Pressure: The US SEC's tightening regulation of the crypto derivatives market may limit high-leverage trading and affect market activity.

Investment Opportunities:

Potential of the RWA sector: Ethereum benefits from the RWA boom, projects like Maker (MKR) may continue to lead, suitable for long-term investment.

Data-driven strategy: If the CPI released on the evening of August 12 shows a decline in inflation, the probability of an interest rate cut in September may continue to rise, which is beneficial for crypto assets.

This article is for informational sharing only and does not constitute any investment advice to anyone.

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