Crypto Markets Experience $16B Liquidation, BTC and Altcoins Plunge

The crypto market faced a significant liquidation event, with $16 billion in leveraged bets on bitcoin, ether, XRP, and other altcoins being forced out. This led to altcoin crashes ranging from 20% to 40%.

Recovery is expected to be gradual due to the following stages:

Market Bleeding: Initial phase where prices continue to drop as liquidation orders flood the exchanges. Market makers temporarily pause to manage risk.
Data Stabilization: Following a crash, information systems stabilize, allowing market participants to absorb major sell orders and restore equilibrium. This process may take several days.
Market Stabilization: Dealers and market makers close long positions acquired during bargain hunting, aiming for profit upon market rebound. This stage is slow, especially on weekends due to reduced liquidity.
Market Finds a Floor: Eventually, stability returns, confidence rebuilds, and the market settles into a stable range.

Continued geopolitical tensions, such as U.S.-China trade issues, may affect the recovery timeline.