More than 67,000 crypto traders were liquidated, losing $258 million as the U.S. Federal Reserve hiked interest rates. The Fed hiked the interest rate by 25 basis points to address rising inflation.
Investors King understands that the hike was widely unexpected as several analysts believed the US apex bank could pause its monetary policy tightening amid turmoil in the banking sector.
Before the Fed’s announcement, the global banking crisis which unfolded in the past few weeks had pushed the flagship cryptocurrency to a nine-month high above $28,000. The asset went even higher as it almost touched $29,000.
Bitcoin reacted with immediate price volatility to the news, falling from its multi-month peak all the way down to $26,700 before recovering some of the lost ground. However, a large number of traders had been liquidated in the rollercoaster.
Data from Coinglass shows that the largest percentage of the liquidation happened on Bitcoin followed by Ethereum which both lost $132 million and $51 million respectively. XRP traders were also not spared as they lost $8 million within the period.
Several altcoins including BNB, Cardano, Polkadot, and Solana also experienced a similar fate. Tron (TRX) dumped the most from the larger-cap alts due to the simultaneous announcement that SEC went after Justin Sun, the founder of Tron Network.
Although crypto traders have experienced several limitations before due to the high volatility of cryptocurrencies, this liquidation is however the largest since the beginning of the year.
On the 17th of May 2021, crypto traders lost $2.38 billion to liquidation in just 24 hours while about $1.26 billion from the total sum was from traders who held a long position in bitcoin.
Meanwhile, crypto analysts have identified the $30,000 mark as a crucial point for Bitcoin to cross in order to maintain its upward rally. Analysts who shared the opinion noted that the mark represents a psychological resistance where several traders are eager to take profit.