The latest crypto crashes have wiped out more than 7% of the market cap, falling from levels above $2.50 trillion to $2.32 trillion at the time of writing.
Bitcoin led this capital outflow, losing more than $10,000 of the value of a single token. The market cap fell from $1.50 trillion to $1.34 trillion, while the price moved from over $77,000 to $67,000.
The move came as major institutions like Strategy announced the sale of 32 BTC for the first time since 2022.
The crypto market is crashing while Bitcoin leads the way
In the charts Bitcoin [BTC] failed to regain a CME gap between $78,000 and $79,000 and fell to the $67,000 price range. That translates to more than $250 billion in destruction in less than a week.
Overall, the derivatives market has liquidated over $700 million in long positions in the last 24 hours. Of this amount, $283 million was wiped out in just one hour.
Market volatility rose to 20%, the biggest one-day spike in four months since February’s 55%. Additionally, the Crypto Fear & Greed Index dropped to 11, indicating extreme fear levels.
Since the recent crypto crashes have wiped out 7% of the total limit, here’s what could happen next for the market:
What is the future for crypto and Bitcoin?
Traders should reassess their long positions as they are likely to wipe out liquidation levels below current levels. A cascade of orders below $67,404 on multiple exchanges would hit the market.
Furthermore, the broader retail sector is likely to dislike crypto due to increasing scams and rug-pulling. AI has resulted in a spike of more than 500% in these cases.
Wall Street joined this economy to guarantee 24/7 trading in cryptocurrencies and stocks, among other things, through tokenization. That way, Wall Street could take over crypto and let everyone buy paper chart derivatives.
More importantly, there was a shift in crypto trading towards tokenized stocks, ETFs and IPOs following the CFTC approval of BTC perpetual futures.
For example, a large part of the capital had shifted to IPOs such as SpaceX, OpenAI, Anthropic and Kraken, among others. These IPOs were similar to Coinbase’s IPO [COIN]. That’s why the stock market made new highs, as seen in the S&P 500 and Nasdaq indices.
It’s worth noting that the crypto market could grow bigger over time once the dust settles, as trending stories tend to revert to their average positions. As a result, this capital would eventually shift back into cryptocurrencies.
Final summary
- The latest crypto crashes have caused the market to lose more than 7% of its limit, wiping around $250 billion from Bitcoin’s limit in less than a week.
- Traders are revaluing their long positions, while retailers despise crypto due to scams, and Wall Street is slowly adopting crypto.