The crypto markets are in freefall once again. All major projects are in the red, with Bitcoin (BTC) falling 4.8% in the daily charts. Ethereum (ETH), on the other hand, has dropped 5.0% in the same timeframe. The global market cap has fallen 4.8% in 24 hours and it is currently sitting at $1.07 trillion.
According to CoinGlass, over $200 million worth of long crypto futures were liquidated within the 4-hour period. $185 million was liquidated within just 45 minutes.
Data from CoinGlass indicated that Bitcoin faced the highest liquidations. 3.42K Bitcoins (BTC), worth $76.38 million, were liquidated in the 4-hour time frame. Meanwhile, 26.11K Ethereum (ETH), worth $40.82 million, was liquidated in the same time frame. Ethereum is followed by Dogecoin (DOGE), with $4.55 million worth of liquidations. Litecoin (LTC) followed the trend with $4.44 million worth of liquidations.
At press time, Bitcoin (BTC) was trading at $22,358.25, down 0.1% in the last hour. On the other hand, Ethereum (ETH) was trading at $1,566.54, up 0.2% in the last hour.
Why is the crypto market crashing?
The liquidations took place after crypto-friendly bank Silvergate raised questions about whether it could continue to run its business. Moreover, the bank has delayed filing with the SEC (Securities and Exchange Commission). The consequent FUD caused the bank’s stock price to plummet by more than 50%.
Speculations about the bank’s financial difficulties initially appeared when Silvergate revealed a $1 billion net loss in Q4 2022, after the unexpected collapse of the cryptocurrency exchange, FTX. The US Department of Justice has recently started looking into the specific transactions between Silvergate and FTX. However, no misconduct has yet been claimed.
Even though several businesses lately asserted they had no exposure to Silvergate, the bank still handled more than $3.8 billion in client deposits in Q4 2022. This was a steep decline from $11.9 billion in Q3 2022.