Cryptocurrency market volatility has returned after a massive dump and subsequent recovery of digital assets.
Cryptocurrency markets pulled back from $70 billion in late trading on April 26. However, it really started to recover during the morning Asian trading session on April 27th.
The playoffs are piling up
In total, there were more than $351 million in total liquidations over the past 24 hours, according to Coinglass data. Moreover, 73% of that happened in the last 12 hours as panic selling continues.
The analytics platform reported that it was the largest long liquidation period for the past month.
Cryptocurrency markets are recovering quickly
The massive sell-off caused Bitcoin to drop 7% in an hour or so. As a result, BTC price dropped to around $27,690 a few hours ago.
Furthermore, there have been $173 million in Bitcoin liquidations over the past 24 hours. This is about half of the total liquidation. About $78 million in long deals and $58 million in short deals were liquidated in just 12 hours.
However, BTC has since recovered nearly 5% of that drop to the $29,000 high again at the time of writing. As a result, BTC liquidations have dropped to $22 million just over the past four hours since the panic sale.
False alarm to sell cryptocurrency
An alert from blockchain analytics firm Arkham Intelligence may have spurred the sell-off. On April 26, she tweeted an alert that there was an active transaction between the US government and Mt. Gox wallets.
This was then shared via encrypted social media which led to panic selling. Volatile traders believed that the stash of BTC held by the government in the Mt. Gox wallet was about to be liquidated.
When Arkham revealed that this was a false alarm, the panic subsided and the cryptocurrency markets began to recover.
However, industry observers note that there will come a stage when the US government will liquidate this Mt.Gox wallet. DeFi Analyst Miles Deutscher comment:
“Today was a false alarm. But sometime in the near future, the US government + Gox Bitcoin mountain will move in. Be prepared for what happens.”
he opened That the government should only hold bitcoin. “I’m not sure why they would want to sell hard cash into shitcoin (USD),” he continued.
“The smart thing to do would be to accumulate more bitcoins, and try to reintroduce (some) kind of monetary standard after things fell flat in 1971.”
The panic dump and pumping added to the volatility of the cryptocurrency market at what was a relatively calm phase.
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