Key facts
- The crypto market cap fell to $2.9 trillion, down over $100 billion in 24 hours.
- Bitcoin dropped below $83,000, and Ethereum fell to $4,436.
- Total crypto liquidations reached $700 million, with $650 million in long positions liquidated.
- US 10-year Treasury yields briefly exceeded 5.35%, a level not seen in 24 years.
- The Crypto Market Fear & Greed Index dropped from 73 to 70.
The cryptocurrency market experienced a significant downturn on Wednesday, with the total market capitalization falling back to $2.9 trillion, marking a loss of over $100 billion in the preceding 24 hours. This selloff was largely attributed to rising US Treasury yields and broader inflation concerns.
Bitcoin (BTC) saw its price drop by more than 4%, falling below the $83,000 mark, while Ethereum (ETH) slumped 6% to $4,436. Other major altcoins, including XRP, Solana (SOL), Dogecoin (DOGE), and Zcash (HYPE), also experienced declines of 3-7%. SKY and Uniswap were notably down nearly 12% and 11%, respectively.
The surge in US 10-year Treasury yields, briefly exceeding 5.35% for the first time in 24 years, was a primary driver of the selloff. This increase in yields, fueled by bond sales and concerns over strikes in Iran, led to widespread profit-taking among high-leverage traders in both stock and crypto markets. Mortgage rates also reached new three-year highs.
However, the benchmark 10-year Treasury yield later retreated to 5.30% as investors awaited Treasury buybacks and the Federal Open Market Committee (FOMC) meeting minutes. Growing expectations that the Federal Reserve might pause interest rate hikes contributed to this reversal.
Adding to inflationary pressures, oil prices rose, reinforcing the view that the Fed might maintain tighter monetary policy for an extended period. The US Dollar Index (DXY) also saw an uptick, reaching 102.50 before settling at 102.3.
Data from Coinglass indicated that total liquidations in the crypto market exceeded $700 million over the past 24 hours. Approximately $650 million of these liquidations were from long positions, while $50 million were from short positions. Over 123,000 traders were liquidated, with the largest single liquidation order being an ETH-USDC trade worth $26.64 million on Binance. The largest Bitcoin liquidation was valued at $11.75 million. ETH, BTC, SOL, XRP, DOGE, XAU, ZEC, UNI, SUI, XAG, and HYPE were among the assets that recorded the largest liquidations, contributing to the broader market decline.