The crypto market has seen higher prices across cryptocurrencies in the recent past, but things went awry on Tuesday starting from 8 AM UTC.
By 10 AM UTC, Bitcoin (BTC) was trading slightly below the $51K mark. The cryptocurrency Ethereum (ETH) went down by 5%, trading a little over $3,700.
The Consequences of Price Drop
Crypto traders and investors were all taken aback by the shocking drop in the value of digital assets. As a result a definitive spike in liquidations could be seen across exchanges. Around 10 AM UTC, Long liquidations crossed the $200 million mark. According to Bybt data, a cryptocurrency derivatives data analytics, this was a massive jump from $38 million one hour ago.
Bybt data further revealed that almost half of these liquidations came from Bybt’s own exchange. Roughly 30% of the liquidations came from Binance. Ethereum suffered the worst fate among the traded cryptocurrencies, loosing around $35 million to liquidation.
Some Advice for Investors and Traders
The crypto market is highly volatile. A positive trend today can suddenly plummet the next day. So it is never wise to invest with margin (investing with the money which is borrowed from broker) to purchase cryptocurrencies or stocks.
As the crypto is unpredictable, it is best not to keep all your eggs in one basket. Aim to develop a diversified portfolio. This will keep your options open and increase your chances of making some money off the market.
Also, El Salvador invested in more Bitcoins recently which could encourage other nations to follow suit. This has the potential to increase the value of Bitcoin in the long run.