Global markets experienced a sharp sell-off in technology stocks on Thursday, with cryptocurrencies, stocks, and precious metals all falling as risk appetite deteriorated. Bitcoin fell below $85,000 yesterday, the first time since November of last year, with a 24-hour drop of 5.51%, forcing the liquidation of over $1 billion in leveraged positions.
Bitcoin falls below 85,000, resulting in a $1 billion liquidation across the entire network.
Bitcoin has recently been plagued by a series of misfortunes. First, traders sold off cryptocurrencies and invested in gold and silver to hedge against the macroeconomic risks of a depreciating dollar. Yesterday, Bitcoin's decline, along with the drop in precious metal prices, further confirmed its status as a leveraged beta tool for risky assets.
Bitcoin fell below $85,000 yesterday, the first time since November of last year, hitting a low of $83,383, a 24-hour drop of 5.51%. Other digital assets saw even larger declines, with ETH, DOGE, and SOL all falling by more than 6%. Over $1 billion in leveraged positions were forced to liquidate.
This plunge continues the cryptocurrency slump that began in early October. While tech stocks and precious metals like gold and silver have risen in recent weeks, Bitcoin prices have stagnated. Currently, Bitcoin is down more than 30% from its all-time high of $126,199 reached in early October.
Chris Newhouse, Head of Business Development at Ergonia , stated :
"Today's weakness highlights the continued role of cryptocurrencies as leveraged beta in traditional risk assets, and the digital market has exacerbated overall risk aversion as stocks (especially tech stocks) continue to come under pressure. The liquidation of leveraged positions has exacerbated the decline, with excessively leveraged long positions being sold off, adding selling pressure to an already fragile market."
Microsoft shares fell 10%, with yen carry trade unwinding exacerbating the decline in Bitcoin.
Microsoft shares fell nearly 10%, its worst single-day drop since March 2020, putting significant pressure on the entire software industry.
According to CNBC , the Senate failed to pass a procedural vote on a government funding bill on Thursday, and the U.S. government could shut down again if the bill fails to pass by the weekend.
The exit of popular strategies such as yen carry trades from traditional markets has also exacerbated this pressure. The USD/JPY exchange rate fell from nearly 160 in the middle of the month to above 152, as traders recently withdrew from the market due to concerns about intervention by the Bank of Japan (BOJ). Meanwhile, the price movements of cryptocurrencies such as Bitcoin are often closely linked to liquidity. When liquidity is abundant, cryptocurrency prices rise; when liquidity is scarce, prices fall.
This article, titled "Microsoft's Severe Loss, Yen Arbitrage Closing, and Bitcoin Falling Below 85K," first appeared on ABMedia, a ABMedia platform.
