The cryptocurrency market experienced a significant crash on Saturday, causing a sharp decline in the prices of Bitcoin, Ethereum, and various altcoins.
Within the past 24 hours, the global market cap dropped by 5%, reaching $1.05 trillion.
Additionally, over 170,000 traders were liquidated, resulting in a total liquidation of $350 million.
The largest individual liquidation occurred on the OKX exchange, involving an ETH-USD-SWAP valued at $2.18 million.
Bitcoin Plummets, Showing Rapid Downfall
Bitcoin, the leading cryptocurrency, witnessed a 5% tumble, primarily within a span of just two hours.
The price of BTC reached a 24-hour low of $25,500, with concerns of a further decline below the $25,000 level.
At the time of writing, Bitcoin is trading near $25,600, indicating a high likelihood of breaching the $25,000 support level.
Ethereum Faces Significant Decline
Ethereum, the second-largest cryptocurrency, also experienced a 4% drop in its price.
The 24-hour low and high for ETH were recorded at $1,765 and $1,854, respectively.
Currently, the price of ETH trades below $1,750, as selling pressure continues to mount with increasing trading volumes.
Altcoins Plummet, Experiencing Substantial Losses
Numerous altcoins faced a significant decline, with tokens like Filecoin, Polygon, Cardano, Solana, Chiliz, Sandbox, Decentraland, and Axie Infinity witnessing drops of over 20%.
Shiba Inu (SHIB) was among the hardest hit, with a staggering 30% decrease in the past 24 hours.
However, some market participants saw this as an opportunity to buy from the dip, leading to a slight recovery.
Factors Contributing to the Crypto Market Crash
The crypto market crash can be attributed to several key factors.
Firstly, major liquidations occurred in cryptocurrencies mentioned in the US Securities and Exchange Commission (SEC) lawsuits against Coinbase and Binance.
Furthermore, the market crash was triggered by Binance.US discontinuing USD fiat support and Robinhood delisting Solana (SOL), Cardano (ADA), and Polygon (MATIC).
In the lawsuits, the SEC classified various tokens as securities, including BNB, BUSD, SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI in the Binance case, and SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO in the Coinbase case.
Additionally, over the past 24 hours, significant liquidations occurred on platforms such as Binance, OKX, and Bybit.
The liquidations affected prominent cryptocurrencies such as BTC, ETH, ADA, SOL, DOGE, LTC, FIL, and MATIC.
Grayscale Investments also filed a request with the SEC to withdraw the Trust’s Registration Statement on Form 10 for Grayscale Filecoin Trust, as the SEC still considers Filecoin (FIL) security, while Grayscale believes otherwise.
Market makers like Jump Crypto and Cumberland pulled liquidity from altcoins, leading to a dumping of major cryptocurrencies on exchanges like Binance and Coinbase.
This caused a cascading effect, contributing to the widespread selloff across the market.
Furthermore, a large amount of Shiba Inu (SHIB) tokens, worth millions, was moved from Shiba Staking to crypto exchange Binance, triggering a significant selloff in both SHIB and BONE prices.
The movement of such a substantial amount of tokens added to the already tense market sentiment.
The Regulatory Crackdown: How Cardano, BNB, Polygon, and Solana Suffered Significant Declines in the Crypto Market
In a market heavily influenced by Bitcoin (BTC) and Ethereum (ETH), recent price fluctuations have caught the attention of investors.
While Bitcoin and Ethereum experienced slight declines, the larger altcoins have faced a more substantial fall.
Notably, Cardano (ADA), BNB (BNB), Polygon (MATIC), and Solana (SOL) have witnessed a significant drop of over 10% in the past week.
This downward trend can be attributed to regulatory actions taken by the US Securities and Exchange Commission (SEC) against industry giants Binance and Coinbase.
Regulatory Pressure And The Crypto Market
The current market volatility stems from the charges filed by the SEC against Coinbase for allegedly facilitating the trading of unregistered securities.
The SEC’s list of implicated assets includes FLOW, VGX, MATIC, and ADA.
A similar charge was also filed against Binance, categorizing assets like BNB, BUSD, SOL, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI as securities.
Interestingly, tokens with substantial trading volumes such as ETH, USDC, USDT, LTC, and BTC were not included in the SEC’s classification.
Charles Hoskinson’s Response
Charles Hoskinson, the founder of Cardano, has responded to these charges by suggesting that the regulatory crackdown is an attempt to pave the way for a Central Bank Digital Currency (CBDC).
Hoskinson believes that the government aims to gain control over people’s finances by leveraging the CBDC in collaboration with influential banks.
He stated that the SEC’s actions are part of an agenda to implement “chokepoint 2.0” in the United States, leading to complete control over individuals’ financial lives.
[BREAKING]
The fund that liquidated $2B of altcoins late Friday night in the broad crypto selloff is rumored to be Scimitar Capital pic.twitter.com/e23mbpuJda
— thiccy (@thiccythot_) June 10, 2023
The Market Impact On ADA, BNB, MATIC, And SOL
The regulatory scrutiny has had a significant impact on ADA’s price, resulting in a market downtrend.
Over the past seven days, ADA has experienced a 15% drop, with an additional 2.8% loss in the last 24 hours alone. As of now, ADA is trading at $0.31, a substantial decrease from its pre-regulation price.
Despite the price decline, ADA’s trading volume has surged from $228 million to over $400 million, indicating high selling pressure.
During the same period, more than $2 billion has been subtracted from ADA’s market capitalization.
Similarly, altcoins like Polygon (MATIC), Binance Coin (BNB), and Solana (SOL) have mirrored ADA’s price action, recording downward turns of 13.6%, 15.7%, and 11.4% respectively in the past week.
Ranking and Market Capitalization
Among the global crypto market capitalization, ADA currently holds the 8th position, while SOL and MATIC rank below Dogecoin (DOGE).
Despite the significant impact on BNB, the asset maintains its 3rd position in the global crypto market.
The rankings highlight the considerable influence of regulatory entities on the cryptocurrency market.
Liquidity Concerns and Reluctance from Partners
The market crash was also exacerbated by liquidity concerns and reluctance from partners.
Market makers, including Jump Crypto and Cumberland, withdrew liquidity from altcoins, causing a disruption in the market.
This sudden withdrawal of liquidity further intensified the selling pressure and contributed to the overall decline in cryptocurrency prices.
Additionally, market makers were caught dumping significant amounts of cryptocurrencies on exchanges like Binance and Coinbase.
This raised concerns among Binance.US partners, who became reluctant to continue working with the exchange.
The resulting uncertainty and lack of support from partners added to the negative sentiment in the market and fueled the selloff across various cryptocurrencies.
Shiba Inu Token Movement
Another factor that impacted the market crash was the movement of over 4 trillion Shiba Inu (SHIB) tokens from Shiba Staking to the popular crypto exchange Binance.
This sudden transfer triggered a sell-off in both SHIB and BONE prices.
The influx of a large number of tokens onto the exchange created a wave of selling pressure, contributing to the downward spiral of prices.
Conclusion
The recent crypto market crash has witnessed significant declines in Bitcoin, Ethereum, and numerous altcoins.
Factors such as major liquidations linked to SEC lawsuits, the discontinuation of USD fiat support, and delistings by platforms like Binance.US and Robinhood have contributed to the market turmoil.
Liquidity concerns, reluctance from partners, and the movement of Shiba Inu tokens have further intensified the selling pressure.
As the market recovers from this crash, investors and traders are closely monitoring the developments and adjusting their strategies to navigate the volatile cryptocurrency landscape.
