Following a dramatic sell-off in the cryptocurrency market, Bitcoin and Ethereum are experiencing significant rebounds. On a recent Friday, Bitcoin plummeted from $121,000 to $109,000 over seven hours. Ethereum also faced challenges, dipping to a low of $3,686 amid this turmoil. CoinGecko data indicates that during this turbulent trading session, Solana was trading just above $173.
Historic Liquidation Event
The day’s trading chaos resulted in nearly $20 billion in liquidations across the crypto sphere, marking it as one of the worst liquidation events in history. Liquidations included approximately $16.7 billion from long positions. Within just one hour, approximately $7 billion was wiped out, primarily from long positions worth around $5.5 billion, according to Sean Dawson, head of research at the options platform Dervie.
Impact on Broader Markets
This significant downturn in crypto markets was mirrored by declines in stock indices. The Nasdaq dropped by 3.6%, the S&P 500 fell by 2.7%, and the Dow Jones slumped 1.9%. The market’s volatility was partly influenced by geopolitical factors, particularly following President Trump’s announcement of increased tariffs on Chinese imports and the cancellation of a meeting with Chinese President Xi Jinping.
Market Recovery
As the weekend approached, the cryptocurrency market began to recover. Analysts suggested that the initial sell-off could have been an overreaction to the geopolitical tensions. Dean Serroni, CEO of Merkle Tree Capital, remarked that the rebound was due to “textbook relief rally” phenomena, noting Ethereum’s impressive 11% surge as short-covering after the market’s initial reaction.
Current Market Performance
- Bitcoin: Up 5% to $115,100
- Ethereum: Up 10.5% to $4,138
- Solana: Up 12%
- BNB: Up 16.5%
- Dogecoin: Up 11.4%
This bounce-back in prices across major cryptocurrencies, including Bitcoin and Ethereum, indicates a resilient market despite initial fears. Analysts stress that this downturn should not be interpreted as a structural break in the market but rather as a reaction to external pressures.
