Why is the Crypto Market Down Today?

Today, January 7, 2024, the overall cryptocurrency market is witnessing a significant price decline, resulting in long liquidations worth hundreds of millions. Amid this market downturn, Bitcoin (BTC), the world’s largest digital asset by market capitalization, has dropped by more than 5%.

$293 Million of Crypto Liquidation

This significant price decline brought BTC down from $102,060 to $96,865 within mere hours, causing liquidations worth $293 million in just four hours, according to the on-chain analytics firm Coinglass. However, the liquidations continue to rise, suggesting that this price decline may not stop here.

Data further reveals that out of the $293 million in liquidations, more than 90% came from long positions, with $266.18 million worth of longs liquidated, while short liquidations amounted to $25.7 million.

Besides BTC, Ethereum (ETH), Solana (SOL), Dogecoin (DOGE), and Cardano (ADA) experienced price drops of 7%, 6.2%, 8.5%, and 8%, respectively. Meanwhile, XRP, the native token of Ripple Labs, appears to be moving against the market trend, showing a 1.5% upward momentum.

Reason Behind the Crypto Crash

You might be wondering why the crypto market is experiencing a sudden crash. The reason lies in a sharp increase in U.S. Treasury yields over the last 10 years. Today, the Institute for Supply Management (ISM) released a report highlighting that the December Purchasing Managers’ Index (PMI) for the private sector was 54.1, higher than November’s 52.1.

This data not only impacted the cryptocurrency market but also led to a sharp decline in U.S. equities due to inflation concerns. Amid this downturn, MicroStrategy (MSTR), the world’s largest corporate Bitcoin holder witnessed a price decline of over 10%.