The cryptocurrency market is having a tough time. There have been a lot of liquidations in the past 24 hours. At the time of writing, this amounts to nearly $640 million facts From blockchain analysis platform Coinglass.

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Bitcoin sees most liquidations

Nearly $200 million in liquidations were made on Bitcoin (BTC) positions, while Ethereum (ETH) also recorded significant liquidations of nearly $160 million during the same 24-hour period.

Other altcoins such as Solana (SOL), Pepe (PEPE), and Dogecoin (DOGE) also saw a significant number of liquidations. This amounts to losses of $756,000, $300,000, and $182,000, respectively. About 85% of the liquidations come from long positions, where investors speculate on price increases. The price drop forces them to liquidate their positions, which can cause a domino effect of further selling and price declines. In the event of a liquidation, the trader loses his entire stake.

What causes BTC to drop?

There are a number of factors that appear to be playing a role in the current decline. For example, there is significant selling pressure from the German government, which owns 3,000 bitcoins, worth around $175 million.

It has recently been moved to several cryptocurrency exchanges and addresses. The majority went to Bitstamp, Coinbase, and Kraken. This follows previous transactions where Germany sent $300 million worth of Bitcoin to exchanges.

There is also expected to be heavy selling pressure from Mt. Gox, which is paying out nearly $10 billion worth of bitcoin and bitcoin cash (BCH). The hope is that the long-term impact will be limited by controlled payments. There are also concerns about the US economy after Federal Reserve Chairman Jerome Powell indicated that a September interest rate cut is less likely.

Should we be worried?

Despite the bearish market conditions, the long-term outlook for BTC remains positive. The cryptocurrency is still in a strong state, partly due to its growing institutional acceptance. Let’s not forget that just over a year ago, the cryptocurrency was still trading at $16,000. Since then, Bitcoin has seen impressive growth.

While further declines are certainly possible, the current bearish moment may also provide opportunities for vigilant investors to buy Bitcoin at a lower price.

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