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Factors such as the sustained selling pressure around Bitcoin have contributed to the Shiba Inu drop today, with liquidations exceeding $2 million toward a four-month high.
Notably, the crypto market has slipped into another round of declines. This time, prices have dropped to shocking levels, triggering long liquidations across the board. Shiba Inu is one of the biggest victims of this selloff round, now down by over 21% this month. Zoomed out, SHIB has collapsed by 46%% since June 1.
This bearish situation positions Shiba Inu as one of the biggest losers of the market-wide collapse. For context, this steeper drop is due to its higher volatility. Currently trading for $0.00001359, SHIB has now given up multiple support levels amid a 7.11% drop this morning. These levels include the thresholds at $0.000015 and $0.000014.
Shiba Inu Long Traders Shoulder Losses
Most investors who held long positions on Shiba Inu placed their hope on the defense these thresholds could mount. Following this breach, most of these long positions have faced liquidations. Derivatives data from Coinglass confirms that SHIB liquidations have reached $1.616 million just this morning.
Notably, about $1.54 million, representing over 95% of total liquidations, is attributable to long positions. Despite the day being far from over, the $1.54 million long liquidation figure is the highest for SHIB in four months. The last time long investors lost this much money was on March 19, when long liquidations exceeded $2.77 million.
Market tracker Crypto Crunch called the public’s attention to a large liquidation that contributed to this figure. Interestingly, a market whale saw his long position worth $980.7K wiped out at 3 AM (UTC) today when SHIB dropped to the lower end of $0.000014.
┌🟥 #1000SHIB Liquidated Long – $980.7K at $0.01
└Funding Rate: 0.00%— CryptoCrunchApp (@CryptoCrunchApp) July 5, 2024
However, Shiba Inu’s liquidations are relatively small when compared to data across the broader market. Over the past 24 hours, SHIB has witnessed $2.31 million in liquidations. However, this represents only 0.3% of the total liquidations across the market, totaling $679 million.
With $226.94 million, BTC accounts for the largest liquidated figure. Ethereum (ETH) comes second, having witnessed liquidations worth $166.48 million in the last 24 hours. The single largest liquidation also involved Ethereum, with a trader losing $18.48 million in one trade on Binance.
Factors Behind the Market Collapse
The market turbulence is largely attributable to selling pressure surrounding Bitcoin, the leading crypto asset. Yesterday, The Crypto Basic spotlighted a series of whale exchange deposits and selloffs contributing to this selling pressure. At the time, BTC had collapsed 5% on the daily chart.
The report confirmed a series of test transactions by the Mt. Gox trustee in preparation for the early July repayments. In the latest update, the Mt. Gox trustee moved 47,228 BTC worth $2.7 billion to a new wallet today. This typically signals an imminent distribution, triggering widespread panic and compounding the selling pressure.
BREAKING
Mt Gox moves 47,228 BTC ($2.71 billion dollars) from cold storage to a new wallet. pic.twitter.com/3ZdSlC1IX2
— Arkham (@ArkhamIntel) July 5, 2024
The ensuing decline in Bitcoin’s price below $55,000 has triggered Shiba Inu’s collapse. Besides the contagion from the BTC drop, SHIB is also facing shark and whale selloffs. Santiment data indicates that wallets holding 10 million to 1 billion SHIB have gradually decreased their balances since June 1.
