A crypto crash is happening today, May 18, with Bitcoin leading the charge, amid rising liquidations and bond yields. Bitcoin price dropped to $76,500, its lowest level in three weeks.
Most altcoins were in the red, with Bitcoin Cash (BCH) falling by 7.30% and Terra Luna Classic (LUNC), Pi Network (PI), and World Liberty Finance (WLFI) plunging by over 5%. The market capitalization of all coins dropped by 1.36% to $2.56 trillion.
Crypto market pulled back today | Source: CMC
Crypto crash triggers leads high liquidations
The ongoing crypto market crash has triggered a surge in liquidations as many traders have been caught off guard. Liquidations jumped by 42% in the last 24 hours to $661 million.
Ethereum positions worth over $257 million were liquidated in the last 24 hours. Similarly, Bitcoin liquidations worth over $182 million were wiped out in the same period. Some of the other most liquidated coins were Solana (SOL), Ripple (XRP), and Bitcoin Cash.
Crypto liquidations happen when highly leveraged trades make substantial losses, pushing crypto exchanges to shut them. This selling normally leads to more pressure, which drags prices lower.
Traders have strong memories of what happened on October 10 last year when over 1.6 million traders suffered $20 billion in losses. Indeed, analysts believe that this is one of the top reasons why Bitcoin and most altcoins have struggled.
Soaring global bond yields is affecting crypto prices
The crypto market crash is also happening as global bond yields jump. In Japan, bond yields have continued moving upwards and are now at the highest level in years.
The same is happening is the United States, where yields continued rising today. Data shows that the 30-year yield jumped to 5.1%, while the 2-year and 10-year moved to 4.1% and 4.6%, respectively.
Global bond yields have soared because of the rising crude oil prices, with Brent and the West Texas Intermediate (WTI) rising to $113 and $110, respectively.
There are fears that this surge will continue in the near term as odds that the Federal Reserve will hike interest rates in the coming months. For one, data showed that the headline consumer price index jumped to 3.8% and the producer price index soared to 6.0%.
Bitcoin and other altcoins tend to underperform the market in high interest rates environment. The same is happening in the stock market, with Asian indices falling sharply. US stock market futures have also continued falling.
Bitcoin and Ethereum ETF outflows
The crypto market crash is also happening as Bitcoin and Ethereum ETF outflows jump. Data compiled by SoSoValue shows that the spot Bitcoin ETFs shed over $1 billion last week.
The same happened with Ethereum, whose funds shed asset for six consecutive days. They lost over $255 million last week, bringing the monthly outflows to over $83 million.
Falling Bitcoin and Ethereum ETF outflows mean that demand is falling. It also means that investors are booking profits after the recent gains.
Looking ahead, the crypto market will react to Donald Trump’s decision on whether to launch another attack against Iran. It will also react to the upcoming FOMC minutes, which will provide more color on the state of the economy.
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