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The encryption market is witnessing a big revolution, as an amazing $ 300 billion has been wiped in only 24 hours. This tremendous sale raised concerns among investors, prompting analysts to explore the basic causes of this dramatic decline.
Bitcoin decrease and ethereum
According to To visions from Kobelsi, a global commentator on capital markets, the frequency of “flash accidents” has increased in the encryption sector since January. These fast price declines can occur without great declining news, leaving investors confused from sudden fluctuations.
The last recession started with Bitcoin (BTC), which initially decreased less than $ 95,000. However, a sharp decrease from 95,000 dollars to $ 90,000 in just 30 minutes in the morning is an invitation to wake up to merchants.
ETHEREUM (ETH) was worse, as it witnessed an amazing decrease of 37 % over the course of 60 hours on February 2, although the trading warlines that were already priced on the market.
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One of the decisive factors that contribute to this encryption volatility, according to analysts, is a severe shift in liquidity and short positioning in Ethereum. In one week, the short centers increased by 40 %, and since November 2024, it has increased by 500 %.
This unprecedented level of default by Wall Street Hedge boxes He created an unstable position for Ethereum, which is now estimated at about $ 300 billion.
Since institutional investors are increasingly shortened, many have turned their attention to Bitcoin, which creates a flagrant contradiction in the market dynamics. While retail interests in Bitcoin, partially driven due to an increase in mimokins, the institutional capital still flows to bitcoin, which exacerbates the fluctuations in Altcoins like Solana.
Retailing for institutional investors amid encryption fluctuations
Kobelsi also highlights that the current market environment is characterized by attracting retail investors and institutional investors. like Liquidity Low, price movements become increasingly irregular. This has led to large “air pockets”, where feelings can turn significantly, leading to rapid changes in prices.
The last emotional analysis reveals that the encryption market is witnessing the lowest levels of enthusiasm for 2024. Fear and greed indicatorWhich previously indicated a state of greed, has now decreased to the level of fear of 29 %. Such shifts in feelings often precede flash accidents, where traders interact with the changing scene.
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In addition to the complexity of the situation, public figures such as Eric Trump were vocal about their views on the largest encryption assets, Bitcoin and Ethereum. Trump has Proposal These prices offer these purchase opportunities, a perspective that may affect the behavior of retailers.
Moreover, companies such as Microstrategy also affected the dynamics of the encryption market. Despite a 45 % decrease in its stock since its peak on November 20, Microstrate is still accumulating Bitcoin through Convertible Offers, enhance their commitment to encryption and probability that affects market morale.
To date, Ethereum managed to restore the level of $ 2,500 after decreasing to less than 2300 dollars on Tuesday, as it recorded 7 % losses in the time frame for 24 hours.
Distinctive image from Dall-E, Chart from TradingView.com
