$440 million has been liquidated as Bitcoin falls 15% and Ethereum drops 14%

Bitcoin dropped 15% on Tuesday, falling below $40,000 for the first time since March 15, while Ethereum was down 14%, falling below $3,000 for the first time since March 23. Bullish traders lost over $439 million, which has been liquidated within 24 hours.

According to CoinMarketCap, it’s part of a larger trend, with crypto markets tumbling 8.5% in 24 hours to hit a market cap of $1.84 trillion.

This has not left bullish traders in good shape. According to Coinglass, over $439 million has been liquidated across the crypto market within 24 hours. That includes 141,000 trades, one of which just lost $10 million on his trade.

Across cryptocurrencies, about $152 million in liquidations occurred among Bitcoin traders, versus $103 million among Ethereum traders. The event mirrors the losses from last week, which also exceeded $400 million.

Lately, Bitcoin, which is historically correlated to other cryptocurrencies is increasingly correlated with stock prices. In March, BTC’s price correlation with the S&P 500 hit the highest rate since October 2020, Arcane Research said.

So what’s going on with stock prices? The S&P 500, an index of 500 top publicly traded companies in the US, closed down 1.7%, the Dow Jones Industrial Average ended Monday 1.2% lower, and the tech-heavy Nasdaq lost a full 2.2% of its value. The Nasdaq was down nearly 4% from Monday through Friday last week. The weekend hasn’t made things much better.

The ongoing Russian war in Ukraine, a new round of COVID lockdowns in China, and the Federal Reserve’s decision to aggressively raise interest rates and choke off the supply of money into the economy – all of this pressing on the stock market.

With less money pumping into the economy as the Fed seeks to fight inflation, crypto market caps very well may deflate, says Arthur Hayes, a founder of BitMEX. The billionaire investment banker-turned crypto entrepreneur wrote of a “coming crypto carnage” and predicted that both Bitcoin and Ether had much further to fall.

“Bitcoin and Ether will bottom well before the Fed acts and U-turns its policy from tight to loose,” he wrote on Sunday. Hayes predicted they will test the $30,000 and $2,500 thresholds before the end of June.