- The prices of Bitcoin and Ethereum plummeted over 3% within an hour late Tuesday, triggering over $170 million in long position liquidations.
- Bitcoin’s price fell below $59,000, reaching lows not seen in a week, while Ethereum dropped below $2,500.
- The sudden price drop does not appear to have a specific trigger, as U.S. stock markets closed mostly flat on Tuesday.
Bitcoin and Ethereum saw a sudden drop of more than 3% within one hour late Tuesday, according to CoinGecko data. The plunge triggered over $170 million in long position liquidations in a single hour, stinging investors who were betting on the asset prices to rise.
Details of the Price Drop
The price of Bitcoin plunged below $59,000 late Tuesday, reaching lows not seen in a week. The more than 3% fall was echoed by Ethereum, which fell below $2,500. Those liquidations were dominated by BTC and ETH investors, with $65 million and $52 million in longs liquidated respectively.
Bitcoin had seen a solid rise above $63,000 on Friday following remarks by US Federal Reserve Chairman Jerome Powell signaling an interest rate cut next month. But the price of BTC stumbled Monday prior to the latest drop.
The price of Solana (SOL) is also down more than 6% for the day at $147. Tokens including XRP and Dogecoin (DOGE) also saw Tuesday dips of more than 5% over 24 hours.
Analysis of Potential Triggers
There doesn’t appear to be a specific trigger for the quick shift, as the US stock markets closed Tuesday trading mostly flat for the day.
Some analysts have pointed to the recent state of Bitcoin price movements as achieving equilibrium, with a recent report from crypto analytics platform Coinglass noting that it might precede a period of heightened volatility.
Meanwhile, in its latest report, Fairlead Strategies warned of a seasonally weak period in September. The firm uses technical analysis for its forecasts and suggested another two months of corrective price action.
Conclusion
The sudden drop in Bitcoin and Ethereum prices liquidated over $170 million in long positions, catching many investors by surprise. While the plunge doesn’t appear to be tied to a specific event, some analysts say it could lead to greater volatility ahead. The price swings highlight the risks in the highly speculative crypto market.
