Crypto Traders Lose $650M In A Single Week — Here's Why

Zinger Key Points
  • Bitcoin and broader crypto market experienced consistent decline throughout the week.
  • Future market cycle focused on building scalable decentralized financial infrastructure.

Traders holding long positions in futures suffered significant losses due to falling crypto prices last week, with around $650 million in longs liquidated across derivatives exchanges since April 17, according to a report.

Binance and OKX saw the most significant volume at $234 million and $197 million, respectively, according to research by The Block.

Bitcoin BTC/USD, the leading cryptocurrency by market cap, fell consistently throughout the week, with a 9.2% drop to around $27,300, while other cryptocurrencies like Ether ETH/USD, Ripple XRP/USD, and Polygon (CRYPTO: MATIC) also experienced a plunge.

The sell-off began on Tuesday, April 18, and has been linked to a lack of liquidity and a large sell order on Binance BNB/USD.

Also Read: Say Goodbye To Fiat Currency: Zimbabwe's Central Bank Introduces Revolutionary Digital Gold Tokens

Coinbase COIN noted on Friday that the correlation between Bitcoin and Ether returns has been falling since mid-to-late March, which could affect quantitative strategies that rely on cross-hedging.

Furthermore, funds can use Ether to hedge against less liquid altcoins.

Despite the recent market downturn, Bernstein analysts believe that the strong price action in Bitcoin this year, up 67% year-to-date, is a sign of a new cycle driven by the building of a scalable decentralized financial infrastructure, which will lead to the first wave of mainstream institutional participation in the market.

"The market still offers an attractive window to participate in this new cycle," the bank's note reads.

While skeptics argue that the market is driven by retail speculation, the bank contends that some speculation is bootstrapping real infrastructure creation.

Read Next: Do Kwon's Lavish Serbian Hideaway - Inside The Crypto Magnate's Secret Sanctuary

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: CryptocurrencyNewsMarketscrypto marketCrypto pricesdecentralized financeDerivatives exchangesFutures tradersLiquidationslong positionsOKX
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!