Crypto traders encountered substantial setbacks as key cryptocurrencies, including Bitcoin and Ether, plummeted, triggering over $1 billion in liquidations. Investors and traders faced an approximate $1.08 billion loss in liquidations as the prices of major cryptocurrencies like Bitcoin, Ether, and Solana nosedived. The downturn in the crypto market on August 5 was exacerbated by the faltering global economy and a sudden crash in Japan’s stock market, leading to the liquidation of nearly 300,000 traders from their leveraged or collateral trades, according to data from Coinglass.
The ongoing bear market saw significant depreciation in the prices of top cryptocurrencies. Bitcoin (BTC) and Ether (ETH) tumbled by over 10% and 20%, respectively. This sharp decline caught traders off guard, especially those expecting a sustained bull run, resulting in massive losses. Bitcoin’s price drop from around $65,000 to the $50,000 range caused traders holding long positions to lose over $315 million within 24 hours, while short positions saw losses of $62.23 million. Similarly, Ethereum traders with long positions lost a total of $305 million, and those with short positions faced losses exceeding $50 million.
In total, long positions across all crypto assets saw losses surpassing $930 million in just 24 hours, while short positions incurred losses of $163.45 million. This rapid downturn affected nearly 80% of all traders within less than 12 hours. Coinglass data revealed that the largest single liquidation order occurred on the Huobi exchange, where a trader lost $27 million in the BTC/USD trading pair. Most liquidations were recorded on Binance, the largest crypto exchange by trading volume, with significant liquidations also occurring on OKX, Huobi, Bybit, and BitMEX, among others.
While traders await a resurgence of the bull run, hackers seized the opportunity to profit during the bear market. As Ether’s value dropped by over 20% — from approximately $2,760 to $2,172 — funds linked to a hack on the crypto bridge Nomad in August 2022 were used to purchase 16,892 Ether. On-chain activity indicated that hackers bought ETH at lower prices and funneled it through the crypto mixer Tornado Cash to obscure their tracks.
The crypto market continues to be a volatile landscape, with significant events shaping the trajectory of digital assets. As traders navigate these turbulent waters, the impact of global economic factors and opportunistic activities by hackers remain critical elements influencing market movements.
