The crypto futures market recorded $435 million in liquidations over the past 24 hours, with long traders bearing the brunt of the losses. Liquidated long contracts reached $385 million after Bitcoin’s price plunged before gradually recovering to around $84,459 during the Asian trading session. The trigger for the market panic did not originate from the crypto industry itself, but rather from surprise economic data out of Tokyo.
Safe-haven assets like gold were also caught in the turbulence of global financial markets. Gold prices briefly slid to an intraday low of $3,986 per troy ounce - a level last seen on July 29 - before rebounding back to $4,020.
Chain Reaction Following Japan Inflation Data
Risk-off sentiment across global markets began with a surge in the Japanese yen, which touched 156.07 per US dollar, its strongest level since September 18. The yen’s rally was sparked by the release of hotter-than-expected Japanese inflation data. That inflation print fueled concerns that the Bank of Japan (BOJ) will hike benchmark interest rates again, a scenario threatening to unwind global yen carry trades.
Market panic quickly subsided after the yen’s advance reversed toward 157 per US dollar. The retreat in the Japanese currency offered relief to Asian equities, helping the Nikkei and Kospi indexes bounce back. In the US, Nasdaq futures also gained 0.17% to 29,190 as selling pressure eased.
Crude Oil Near $100 Remains a Headwind
Even as currency tensions in Asia eased, risk asset markets still face headwinds from the energy sector. West Texas Intermediate (WTI) crude oil prices held firm near $100 per barrel, keeping the threat of global inflation bearing down on financial markets. US President Donald Trump’s move to invoke a Cold War-era law to boost domestic fuel production has yet to significantly cool oil prices.
Adding to market pressure, institutional investor interest has yet to show any meaningful recovery. Data from SoSoValue shows spot Bitcoin ETFs in the US posted net outflows of $381 million on Thursday. The lack of fresh capital inflows from ETF vehicles has left Bitcoin’s recovery attempt lacking sustained support.
For derivatives traders, the wipeout of $385 million in long positions serves as a stark reminder of the elevated risks of trading with leverage during volatile macroeconomic conditions. As long as crude oil prices hover around $100 and spot ETF inflows have yet to return, global liquidity trends will remain the primary driver of crypto market stability.
Via CoinDesk.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
