Bitcoin and other cryptocurrencies plummeted early on Friday morning, with digital assets continuing to wallow at miserable levels over the past several weeks. Divergent opinions exist among the market players regarding what will happen next.

Are things likely to worsen on the cryptocurrency market? Or, will there be a turnaround following today’s major setback?

According to CoinMarketCap data, Bitcoin dropped 7.02% in the last 24 hours to $26,819 in early morning Asian trading, recording a weekly loss of 9%. The leading cryptocurrency touched a two-month low of $25,409 on Friday morning.

$1 Billion Lost In Short Span Of Time

Traders lost $1 billion in the last 12 hours due to liquidations, according to data from Coinglass, as digital asset markets experienced one of their worst sell-offs of the year.

Bitcoin Traders Dealt A Heavy Blow On Long Bets

Bitcoin was able to climb to a little past the $29,000 level before hitting a two-month low, Friday. Similarly, Ethereum (ETH) experienced a significant decline, reaching a low of approximately US$1,550, before recovering to a level just below US$1,700.

At the time of writing, Bitcoin was trading at $26,492, down 7.3% in the last 24 hours, and sustaining nearly 10% in losses in the last seven days, data from Coingecko shows.

Other significant cryptocurrencies in the top 10, excluding stablecoins, were not immune to the day’s declines caused by macroeconomic variables.

Long positions, which are bets on price increases, were eliminated to the tune of $821 million, according to CoinGlass data, as traders swiftly ran for the exits.

The largest amount of losses were sustained by Bitcoin traders, who liquidated long positions worth approximately $498 million, followed by ether (ETH) traders who lost $302 million. The XRP token of Ripple fell 12.5% to $0.5136, for a weekly loss of 18.8%.

Biggest Liquidation Since June Last Year

Liquidations arise when an exchange closes a trader’s leveraged stake due to insufficient funds (margin) as asset prices decline, resulting in additional losses and price decreases.

Coinalyze data reveals that this represented the biggest number of Bitcoin liquidations in a 24-hour timeframe since June 2022, in the midst of collapsing foreign currencies, Chinese economic concerns, soaring bond yields and hawkish meeting minutes from the U.S. Federal Reserve.

Meanwhile, adding to the gloomy mood in Bitcoin, The Wall Street Journal reported on Friday that Elon Musk-founded rocket business SpaceX wrote down the value of its Bitcoin assets by a total of $373 million in the previous 24 months.

In the past twenty-four hours, the total crypto market capitalization decreased by 5.70% to $1.07 trillion, which is near the psychologically significant $1 trillion threshold.

Featured image from Kryolan