Weekly Market Wrap: Crypto Market Plunges, $1B Lost in Liquidations Within 24 Hours

In a significant crypto market downturn, Bitcoin (BTC) and Ether (ETH) experienced a sharp sell-off, causing substantial losses for traders. Within 24 hours, the cryptocurrency community suffered approximately $1 billion in liquidations, according to Coinglass data. This sell-off marked one of the most severe market declines of the year, with Bitcoin's price dropping to its lowest point in two months, reaching around $25,000 on the Binance exchange.

During this market turmoil, traders holding long positions (expecting prices to rise) faced considerable losses, as $821 million worth of long positions were liquidated. Bitcoin traders accounted for the most significant portion of these losses, with $472 million in long liquidations, followed by Ether with $302 million. This level of Bitcoin liquidations had not been seen in a single day since June 2022.

The sell-off was attributed to a combination of factors, including concerns over financial market instability, Chinese economic issues, and soaring bond yields. These events intensified the downward pressure on crypto prices, resulting in cascading liquidations that further exacerbated the decline.

While some initially speculated that events like SpaceX's supposed Bitcoin sales or the bankruptcy of China Evergreen might have triggered the market crash, these claims were largely unsubstantiated. SpaceX reportedly wrote down the value of its Bitcoin holdings without confirming any sales, and China Evergreen's bankruptcy wasn't conclusively linked to the crypto market downturn.

Market analysts suggested that the sudden drop was more likely due to market structure and liquidations rather than a single fundamental catalyst. The market had been relatively flat and illiquid, creating conditions conducive to sudden price movements. Additionally, the anticipation of a Grayscale court ruling regarding the issuance of a Bitcoin exchange-traded fund (ETF) added to market uncertainty. This ruling was expected to impact market sentiment, with a favorable outcome potentially leading to a surge in prices.

Shibarium Goes Live, SHIB Drops 8.1% Amidst Technical Issues Rumors

Shiba Inu has successfully launched its Shibarium mainnet, an Ethereum layer-2 scaling solution, after extensive testing involving millions of users and the creation of 21 million wallets. Shibarium employs a unique proof-of-participation (PoP) consensus mechanism that selects validators based on their cryptocurrency holdings, reducing computational costs. The solution aims to enhance Ethereum's scalability and cost-efficiency. Despite Shiba Inu's price decline in the past, its community remained active, creating a decentralized ecosystem including ShibaSwap, BONE token, a metaverse, and a Web3 game. The SHIB token surged in anticipation of Shibarium's launch, supported by over 100 companies building on the platform. Shytoshi Kusama, Shiba Inu's lead developer, emphasized Shibarium's commitment to community-driven and decentralized innovations.

Following the mainnet launch, Shiba Inu and related token prices experienced a notable drop. SHIB, BONE, and LEASH tokens fell in value amidst rumors of a technical issue with the Shibarium network. SHIB decreased by 8.1%, BONE by over 14%, and LEASH by 23.5%. Reports indicated a potential hiccup, with claims that assets bridged to Shibarium couldn't be recovered due to technical difficulties. The issue led to concerns over a flawed bridge, potentially causing losses of approximately $2.46 million in Ether and BONE tokens. The situation raised questions about the stability of the network and its impact on token prices.

FTX and Genesis Settle for $175 Million Following $4 Billion Claim Amidst Bankruptcy Turmoil

Bankrupt cryptocurrency exchange FTX has reached a settlement worth $175 million with collapsed crypto lender Genesis, resolving claims tied to Alameda. This comes after a nearly $4 billion claim was made on behalf of Alameda Research, FTX's failed sister company, accusing Genesis of being a key feeder fund for FTX's fraudulent business model. The agreement was described by FTX's current CEO, John J. Ray III, as "fair and equitable." The settlement still requires approval from judges overseeing each bankruptcy case.

Initially, FTX had sought to recover around $3.9 billion from Genesis. Genesis, owned by Digital Currency Group, halted customer withdrawals after FTX's collapse in November. Alameda Research, created by FTX co-founder Sam Bankman-Fried, also collapsed when FTX went under. The bankruptcy of FTX, a significant player in the crypto industry, occurred in an unexpected and turbulent manner in 2022. Bankman-Fried, also known as SBF, faced legal troubles and was arrested in the Bahamas, accused of mismanagement and fraud leading to one of the most abrupt corporate collapses in history.

Bankman-Fried's trial, facing charges including tampering with witnesses and misusing customer funds for political contributions, is scheduled to begin in October.

XBO Featured Coin of the Week —– SHIB

In August 2020, SHIB was introduced as an ERC-20 token on the Ethereum blockchain. It serves as the native currency for the Shiba Inu community, a project with meme origins that seeks to establish a collection of decentralized applications (dApps) on the Ethereum platform. SHIB was created to provide a playful and less serious alternative to mainstream cryptocurrencies like Bitcoin and Ether.

Taking inspiration from Dogecoin, which is rooted in the Shiba Inu dog meme, SHIB adopts a similar approach with a charming dog mascot and a community that prioritizes humor and engagement. Nonetheless, a distinction lies in SHIB's massive supply of one quadrillion tokens, unlike Dogecoin's capped supply of 129 billion coins. This vast quantity keeps individual tokens at a low value, and the project's creators emphasize that SHIB is not meant for investment purposes.

Despite this emphasis, SHIB has garnered a substantial following, becoming a prominent example of meme-inspired cryptocurrencies. The project has extended its offerings by introducing additional tokens such as LEASH and BONE, designed to complement SHIB and enhance the ecosystem's functionality. Moreover, ShibaSwap, a decentralized exchange, was launched to facilitate the trading of SHIB and other tokens, along with rewarding users for providing liquidity. In summary, SHIB has cultivated a dedicated community of enthusiasts drawn to its whimsical and meme-centric approach to the world of cryptocurrencies.

Buy, sell, and swap SHIB securely at XBO.com.

Disclaimer: Our content does not constitute financial advice. It is only intended for informational and educational purposes.