Report reveals shocking impact of liquidation cascade on crypto market

Report reveals shocking impact of liquidation cascade on crypto market

August Market Downturn and Liquidations

The previous  30 days proved to be a challenging one for the cryptocurrency markets, with August marking the worst performance since Bitcoin (BTC) hit its lowest point in November 2022. At the beginning dismissed as a summer slump, the situation escalated as liquidations swept through the derivatives market, resulting in a 7.3% loss in Bitcoin’s value and a 6.9% loss in Ether’s value. Regardless of Grayscale’s court victory providing short-term relief, prices quickly returned to their starting levels at the beginning of the 30 days. The market plunge triggered one of the largest liquidation events in cryptocurrency history, causing over $1 Billion in losses when prices dropped to $26,000.

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Declining Deal Financial resources Investment

Adding to the industry’s woes, deal financial resources (VC) investment inflows plummeted by 42.7% in August compared to July. Only $401.9 Million was invested across 77 deals during this period. Although while investments in the cryptocurrency sector had been gaining until May of in the year, they have been steadily declining ever since. In August, infrastructure projects secured 18 individual deals and received $107 Million in funding, while centralized finance (CeFi) managed to secure $100 Million across 3 deals. These investment trends are considered lagging indicators, suggesting that investments will rebound once overall market sentiment becomes more positive.

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Cointelegraph Research Team

The Cointelegraph Research team is comprised of highly skilled individuals who possess extensive knowledge and experience in the blockchain industry. By combining academic rigor with practical expertise, these researchers strive to provide accurate and insightful content that is unparalleled in the market.

Hot Take: Cryptocurrency Markets Face Whole lot of Challenges

The cryptocurrency markets experienced a tumultuous 30 days in August, facing whole lot of challenges such as a market downturn and substantial liquidation events. Bitcoin (BTC) and Ether both suffered losses, erasing a considerable portion of their value. In addition, deal financial resources investment in the cryptocurrency industry continued to decline, reaching a new low point. Nonetheless, regardless of these setbacks, there is hope for recovery. Investment trends suggest that once market sentiment shifts positively, investments will likely rebound. The Cointelegraph Research team remains committed to delivering accurate and insightful content to keep you notified about the latest developments in the blockchain industry.

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