The Cryptocurrency Market Is Rising and Liquidations Are Increasing – Why?

On October 25, the cryptocurrency market rose, with Bitcoin (BTC) crossing the symbolic threshold of $20,000 and Ether (ETH) crossing $1,500. What are the reasons for this rise and can we expect it to continue in this direction?

The cryptocurrency market rises without warning

This has not happened for several weeks: Bitcoin (BTC) has surpassed the symbolic bar of $20,000, taking the entire market with it to a rise that is as surprising as it is dazzling. Also, we can be pleased to observe the green cryptocurrency market this morning:

The state of the cryptocurrency market on the morning of October 26

So, currently, Bitcoin is showing a proud price of $20,250. but its progress remains below that of Ether (ETH)., forever second. Indeed, in the last 24 hours, the price of BTC could see an increase of about 5%. ETH literally jumped almost 14% in just 8 hours.

ETH price

ETH performance over the last 24 hours

As I write these lines, ETH is sitting above the $1500 mark, which hadn’t happened to him since mid-September after applying The Merge update. Indeed, following the latter, which made the Ethereum blockchain a proof-of-stake (PoS), ETH has been rallying between $1,200 and $1,400 for a long time.

Overall, almost all of the top 100 cryptocurrencies by market capitalization saw gains of at least a few percent. Some experienced more price increases such as ADA (11%), SOL (10%) or even FLOW (11.5%). ETH related cryptocurrencies such as Lido’s stETH or Ethereum Classic (ETC), they could naturally observe a significant increase.

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Why has the cryptocurrency market gained confidence?

While Bitcoin seems to be de-correlated from the financial market lately, it seems that there is good news from traditional finance have created confidence in cryptocurrency investors.

Indeed, within the last 24 hours major stock indices could observe significant growth. The Dow Jones Industrial Average (DJI) gained 1.07%, the S&P500 (SPX) gained 1.63% and finally the Nasdaq Composite (IXIC) gained 2.25%.

Additionally, 72% of S&P500 companies report earnings in the third quarter, according to FactSet It exceeded Wall Street expectations. Thus, indices modeled on the results of the largest companies manage to partially relax investors.

However, interest rate hikes by major central banks remain the latter’s main concern, coupled with expectations for the US Federal Reserve (FED). trying to control inflation in some way.

According to some observers, in order not to completely choke the American economy, especially the real estate market, the Fed may release the ballast before the end of the year. It remains impossible to predict the future and We have to wait for the next Fed meeting until November 1 hoping to see a little more clearly.

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Annihilation explosion

As with every major market move, some investors try to make a profit by betting on the rise or fall of cryptocurrency. But over the past 24 hours, cancellations have literally exploded. crossed the billion dollar limit.

24 Hour Closures.png

24 hour cancellation status

Not surprisingly, the vast majority of traders affected by this wave of cancellations attempted it shorts certain assets, in other words betting that they will fall. The vast majority of liquidations involved BTC ($500 million) and ETH ($434.5 million).

As the graph below shows, the wave of cancellations over the past 24 hours has far surpassed the previous wave of $305 million on September 9th.

Date of termination

History (in yellow) of short (red) and long (green) cancellations by BTC price

Overall, the cryptocurrency market made its first really noticeable move here in a long time. but predicting the future is difficultso the financial market itself is in the most complete fog.

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Sources: Coin360, Yahoo Finance, Coinglass

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