$300 Billion Lost in 24 Hours Amid Rising Crypto Flash Crashes
The crypto market has seen a $300 billion loss within 24 hours, raising investor concerns. Analysts are investigating the causes of this volatility.
Bitcoin and Ethereum Decline
- Frequency of "flash crashes" in crypto has increased since January.
- Bitcoin (BTC) dropped from $95,000 to $90,000 rapidly, alarming traders.
- Ethereum (ETH) fell by 37% over 60 hours on February 2nd, despite trade war news already priced in.
- Short positions in Ethereum surged by 40% in a week and have increased by 500% since November 2024.
- This shorting trend by hedge funds puts Ethereum's $300 billion valuation at risk.
- While retail interest in Bitcoin declines, institutional investment continues, amplifying altcoin volatility.
Retail vs. Institutional Investors
- Current market shows polarization between retail and institutional investors as liquidity decreases.
- Market sentiment is at its lowest for 2024; the Fear and Greed Index has fallen to 29%.
- Public figures like Eric Trump suggest price dips may present buying opportunities, potentially influencing retail behavior.
- MicroStrategy continues accumulating Bitcoin through convertible note offerings despite a 45% stock drop since November 20th.
Ethereum recently regained the $2,500 level after dipping below $2,300, with a 7% loss in the last 24 hours.
