TLDR
- Total crypto market capitalization dropped $84 billion to $3.61 trillion in single-day selloff
- Bitcoin fell to $108,000 support with potential further decline to $105,000 if pressure continues
- Market volatility follows October’s historic flash crash that eliminated $370 billion in valuations
- Over $19 billion in leveraged positions were liquidated during October’s crash event
- Geopolitical tensions and macro uncertainty keep traders cautious amid ongoing recovery struggles
The cryptocurrency market faced renewed selling pressure on Wednesday, October 22, with total market capitalization falling more than $84 billion. The decline pushed the aggregate value of all digital assets down to $3.61 trillion.
Bitcoin dropped to $108,057 after briefly testing levels near $114,000 during the trading session. The world’s largest cryptocurrency now rests at a critical support zone around $108,000.
The market had shown strength earlier in the day with an intraday gain of $103 billion. However, prices reversed sharply, demonstrating the fragile nature of current investor confidence.
Ethereum traded around $3,870, down approximately 4-6% over the past seven days. Most alternative cryptocurrencies posted similar losses or remained relatively flat during this period.
Flash Crash Continues to Impact Markets
The current weakness stems from ongoing fallout following October’s devastating flash crash. That event wiped $370 billion from cryptocurrency valuations within hours after President Trump announced increased tariffs on Chinese imports.
The crash triggered the largest liquidation event in crypto history. More than $19 billion in leveraged trading positions were eliminated as prices plummeted.
Market liquidity and trading volumes have not recovered to pre-crash levels. Traders have adopted defensive positioning strategies in response to the extreme volatility.
Short sellers have capitalized on Bitcoin’s inability to break through resistance levels. Reports indicate some traders have established short positions exceeding $200 million in combined exposure.
Bitcoin has failed multiple times to push above $114,000 resistance. These repeated rejections have reinforced bearish sentiment among short-term traders.
Critical Price Levels in Focus
Technical analysts are watching Bitcoin’s $108,000 support level closely. A breakdown could send prices toward $105,585, with $105,000 representing the next major support zone.
The total cryptocurrency market cap faces potential support testing near $3.56 trillion. Breaking this level would confirm additional downside pressure across the sector.
External Factors Weigh on Sentiment
Escalating geopolitical tensions between the United States and China continue pressuring risk assets. Cryptocurrency exchange-traded funds have seen consistent outflows in recent trading sessions.
Global credit concerns and inflation uncertainty are contributing to risk-averse behavior among investors. Market participants are awaiting the upcoming U.S. Consumer Price Index report for clearer economic signals.
British Columbia implemented a permanent ban on new cryptocurrency mining connections to its electrical grid. The policy effectively ends new mining project development in the province.
Analysts note that while some view this period as a necessary cooldown, the market remains in a cautious phase. Traders are waiting for stronger macro catalysts before committing to new positions as the sector recovers from October’s liquidation event.
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