Crypto Market Bounces Back Strong After Massive Liquidations
After a turbulent start to the week filled with considerable liquidations, the crypto market has finally found its footing and is showing signs of recovery, riding on positive broader macroeconomic shifts.
Liquidations recorded a notable drop, totaling $384.4 million in the past day, painting a more optimistic outlook compared to recent days. Concurrently, the global market cap made a 1.1% climb within the last 24 hours.
The market turbulence stemmed from concerns surrounding a potential global recession, ongoing trade tensions, and wider economic uncertainties, triggering substantial dives in Bitcoin (BTC) and Ethereum (ETH) prices to both monthly and yearly lows.
The resultant market downturn led to widespread liquidations, seeing close to $1 billion wiped out from the market recently. However, the latest data suggests a more favorable trajectory.
Coinglass data reveals that $384.4 million was liquidated over the past day, with $138.2 million linked to long positions and $246.2 million to short positions.
In particular, Bitcoin witnessed $186.7 million in liquidations, of which $146.0 million was tied to short positions. Ethereum followed suit with $73.6 million liquidated, comprised of $40.3 million from long positions and $33.1 million from short positions.
Bitcoin managed to reclaim lost ground, surpassing $80,000 and reaching $82,299—a notable 3.6% surge in just one day.
The market recovery can be partially attributed to recent diplomatic progress. Reports from Bloomberg indicate that Ukraine has agreed to a temporary ceasefire following a US proposal, alleviating geopolitical tensions that had been impacting the market sentiment.
Moreover, Ontario's decision to halt 25% tariffs on electricity exports to Michigan, New York, and Minnesota has also played a significant role in pacifying trade tensions.
Key US political figures, such as House Speaker Mike Johnson, have offered words of reassurance to the market participants, highlighting the potential stabilization impact of President Trump's economic strategies that were initially seen as a destabilizing factor.
"Give the president a chance to have these policies play out," Johnson remarked.
White House Press Secretary Karoline Leavitt echoed this sentiment, emphasizing that the recent market downturn should be viewed as a temporary phase rather than a permanent trend, citing the ongoing economic transition.
Leavitt highlighted that market indicators like stock prices, trading volumes, and liquidations are snapshots in time and subject to change. The collective efforts to provide political certainty, ease trade tensions, and mitigate geopolitical risks have all contributed to the recent resurgence witnessed in the crypto market.