Why is the crypto market down today?

Today, January 7, 2024, the overall cryptocurrency market is experiencing a significant price drop, resulting in long liquidations worth hundreds of millions. Amid this market downturn, Bitcoin (BTC), the world’s largest digital asset by market capitalization, fell by more than 5%.

$293 million in cryptocurrency liquidation

This dramatic price drop sent Bitcoin plummeting from $102,060 to $96,865 in just a few hours, causing $293 million worth of liquidation in just four hours, according to on-chain analytics firm. Quinglass. However, Liquidation The rise continues, indicating that this decline in prices may not stop here.

The data also reveals that of the $293 million liquidated, more than 90% came from long positions, with $266.18 million worth of longs liquidated, while shorts amounted to $25.7 million.

Along with Bitcoin, Ethereum (ETH), Solana (SOL), Dogecoin (DOGE), and Cardano (ADA) saw price declines of 7%, 6.2%, 8.5%, and 8%, respectively. Meanwhile, XRP, Ripple Labs’ native token, appears to be moving against the market trend, showing upward momentum of 1.5%.

The reason behind the collapse of encryption

You may be wondering why the cryptocurrency market is experiencing a sudden collapse. The reason lies in the sharp increase in US Treasury yields over the past ten years. The Institute for Supply Management (ISM) today released a report highlighting that the private sector Purchasing Managers’ Index (PMI) for December stood at 54.1, up from 52.1 in November.

This data not only affected the cryptocurrency market, but also led to a sharp decline in US stocks due to inflation fears. Amid this decline, MicroStrategy (MSTR), the world’s largest bitcoin holder, saw a price decline of more than 10%.