Wall Street Tech Sell-Off Impacts Crypto Market: $250M in Liquidations

Tech Market Slump Affects Crypto

A recent sell-off in US tech stocks has extended its influence to the cryptocurrency market. Bitcoin has dropped by over 3% in the last 24 hours, reaching $64,000. According to CoinGlass, the broader crypto market has experienced significant turmoil, with over $290 million in total liquidations, including $262 million from long positions alone.

Binance and Other Exchanges Hit Hard

Binance reported the highest level of liquidations, amounting to $118 million, with 88% of these being long trades. Similarly, Asian crypto exchanges OKX and Huobi experienced 94% long liquidations.

US Tech Stocks Face Sharp Decline

On Wednesday, major US technology stocks experienced their worst day since 2022. The excitement surrounding artificial intelligence appeared to diminish, leading to a decline in tech shares. Alphabet, the parent company of Google, and Tesla both saw their stocks fall by up to 12%. Collectively, the “Magnificent 7” tech stocks lost over $750 billion in market capitalisation, marking a record single-day loss for the group.

Benjamin Celermajer, co-chief investment officer at Magnet Capital, commented, “It mainly seems that after a bad night for equities in the US, crypto, like most asset classes, is feeling a little bit of a flow-on effect in sentiment.”

Altcoins Experience Steeper Declines

Alongside Bitcoin, other cryptocurrencies have also faced significant drops. Ethereum fell by 8%, reaching $4,150 shortly after the launch of its spot ETF. The ETF debut seems to have triggered a sell-off in Ether, as investors capitalised on the news.

Japanese Yen Surge Spurs Additional Liquidations

On Thursday, the Japanese Yen made a strong recovery against the US dollar, causing further liquidations across various asset classes, including equities, gold, and cryptocurrencies.

The Yen reached its highest value in over two months against the USD. A stronger Yen negatively impacts local exporters, contributing to a technical correction in the Nikkei 225 index. The Yen has gained 6% against the USD from its recent lows, adding to global market volatility amid the decreasing interest in artificial intelligence.

While the market turmoil has led to significant liquidations, the ongoing fluctuations highlight the sensitivity of cryptocurrencies to broader financial market trends and currency movements.