CEO of Bybit Ben Zhou revealed that actual liquidations in the crypto market far exceed reported figures. He estimates total liquidations at $8 billion to $10 billion, much higher than the widely cited $2 billion.
Bybit’s 24-hour liquidation on Coinglass shows $333 million. However, Zhou clarified that this figure doesn’t reflect the full extent. He noted API limitations restrict how much liquidation data gets pushed.
Other exchanges follow similar practices, limiting visibility into total market liquidations. Zhou assured us that Bybit would now push all liquidation data to enhance transparency.
The Kobeissi Letter analyzed the crypto crash and linked it to trade war fears. Despite crypto’s decentralized nature, $2.3 billion was liquidated in the past 24 hours, exceeding the FTX collapse’s liquidation levels.
US Dollar strength impacts crypto prices
The report highlighted crypto’s increased correlation with risk assets. Bitcoin’s S&P 500 correlation reached a high of 0.88 during the current year. As stock market futures plunged with inflation and decelerating GDP concerns, crypto tumbled in tow.
Liquidity played a big role in busting it. Cryptocurrency markets become weakened when liquidity is low. It is exactly what happened over the past five years. Ironically, investments flocked to the US Dollar, and it touched a 52-week high. Trade wars compel investors towards the dollar, a safer haven in its view.
Retail investors added more than $1 billion in December in crypto ETFs but became nervous about uncertainty. Ripple and cryptocurrencies plunged over 40%. That a 45-minute sell-off at 8:30 PM ET sealed a state of panic testified to the character of a fall in fright.
Crypto markets nowadays react strongly to global financial events. In the most current trade war, its value in the marketplace was under $300 million. Today, its value is over ten times, closely linked with traditional finance. There will be heightened volatility with liquidity issues and mounting macroeconomic risks.
