According to Coinglass, the total market liquidation value in 1 hour exceeded $210 million. Over the past 24 hours, in the past 24 hours, 28,201 traders were liquidated, with the total liquidations coming in at $79.43M.
The crypto market capitalization was also down around 5%, equivalent to $50 billion. Since February, the cap chart has been relatively stable, fluctuating between $1,000-$1.040 billion. However, the trend is now tilted to bearish.
Ethereum lost 5.2%, Bitcoin lost 4.74%, LTC lost 10%, BSV lost 18% and FIL lost 10%.
According to a recent report, FTX’s total deficit was $8.6 billion, while FTX US recorded a deficit of $116 million.
The sudden plunge has investors and market analysts speculating about the potential causes that triggered the sell-off. Some attributed the decline to a technical correction in the market, while others believed it could be related to concerns about rising inflation rates and the possibility of a rate hike by the United States Federal Reserve.
While the reason for the latest market correction is unknown, it is likely to come from Silvergate Bank. This US-based bank is well known in the crypto space for providing banking solutions to crypto companies through the SEN network. The reason for Silvergate’s popularity is that the bank is licensed and insured by the US Federal Deposit Insurance Corporation (FDIC), giving depositors extra protection in the case being bankruptcy.
Silvergate this week has delayed filing its annual report with the SEC, raising concerns about the bank’s situation, which had previously been hit hard by the collapse of FTX and Genesis. Silvergate already reported a $1 billion loss in the fourth quarter, wiping away most of a decade’s worth of profit, as it was forced to sell assets at fire-sale prices to remain liquid and stave off a bank run sparked by FTX’s collapse in November. The bank said in January it expected to sell $1.7 billion of additional assets soon to repay a loan from the Federal Home Loan Bank of San Francisco. Its filing suggests that wasn’t enough.
Since last night, many crypto giants in the US have announced to end their relationship or have no relationship with Silvergate Bank, including Coinbase, Galaxy investment fund, stablecoin company Circle and Paxos, the investment company MicroStrategy, etc.