TL;DR
- Whale Liquidations and Market Turmoil: A whale portfolio with a long position in Ethereum (ETH) contracts faced liquidations totaling 7,467.5 ETH (approximately $22.3 million). Other traders, including one using the address “0x0b5a…d8c5,” suffered significant losses.
- Exchange Impact and Bearish Trends: Liquidations occurred primarily on exchanges like Binance, HTX, Bybit, BitMEX, and OKX. Huobi witnessed the largest single liquidation order, around $27 million.
- Global Stock Market Rout and Catalysts: Major stock indices worldwide declined sharply. Traders panicked due to US recession concerns and the unwinding of the Japanese yen carry trade.
Blockchain security company PeckShield reported a significant market event on Monday morning. A whale portfolio, identified as “0xac4e…7597f,” holding a long position in perpetual Ethereum (ETH) contracts, experienced liquidations totaling 7,467.5 ETH, equivalent to approximately $22.3 million.
#PeckShieldAlert #Liquidation A whale (0xac4e…7597f) who took a long position in Ethereum (ETH) has been liquidated ~7,467.5 $WETH (worth ~$22.3M) pic.twitter.com/1iRssIc0ee
— PeckShieldAlert (@PeckShieldAlert) August 5, 2024
Another trader, using the address “0x0b5a…d8c5,” suffered losses of nearly $6 million. Additionally, two other Ethereum whales lost $5.8 million and $7.38 million, respectively. These losses were part of a broader market crash that led to over $1 billion in digital asset liquidations across various exchanges.
Exchange Impact and Bearish Trends
The liquidations primarily occurred on exchanges such as Binance, HTX, Bybit, BitMEX, and OKX. Huobi witnessed the largest single liquidation order via the BTC/USD pair, amounting to around $27 million. Binance traders faced losses of approximately $415 million, while OKX and Huobi traders lost $324 million and $148.7 million, respectively.
The market turmoil extended beyond Ethereum, with Bitcoin (BTC) dropping below $50,000 for the first time since February. Ethereum (ETH) also plummeted by 20% to $2,300, leading traders to dub the event “Crypto Black Monday.” At the time of writing, ETH is showing minimal signs of recovering, trading at around $2,400, down 12%.
Global Stock Market Rout and Catalysts
Major stock indices worldwide experienced sharp declines. The Nasdaq 100 futures dropped over 3.5%, and Japan’s Nikkei 225 fell by 6% (at one point, down 13%). Two key catalysts contributed to the market turmoil:
- US Recession Concerns: Traders panicked due to last week’s concerning US jobs data, fearing a potential recession or global slowdown. Worries persist that the Federal Reserve might be slow to cut interest rates to support economic growth.
- Japanese Yen Carry Trade Unwinding: The unwinding of the popular pro-risk Japanese yen carry trade exacerbated the situation. Borrowing low-interest yen to invest in higher-yielding assets has been widespread for years. However, the Bank of Japan unexpectedly raised interest rates by 25 basis points, causing the yen to surge by 11% from last month’s lows. This forced traders to close out their yen-carry positions, impacting risk assets across the board.
Is the Crypto Bottom In?
While Bitcoin rebounded nearly 9% from session lows, predicting the market bottom remains challenging. In such a volatile environment, timing the bottom is uncertain. Those who succeed often rely on luck.
However, some conditions suggest potential stabilization. The recent US ISM Services PMI data for July indicates that a recession may not be imminent. As the crypto market navigates these turbulent waters, traders remain vigilant for signs of recovery or further downturns.
