Global cryptocurrency markets experienced a significant slump, triggered by a massive wave of liquidations exceeding $637 million, primarily impacting key assets such as Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP). According to a recent market report from the analysis firm GeekStake, the main catalyst for this price collapse was a signal from Japan regarding a likely imminent rate hike. This anticipated shift in monetary policy in the world's third-largest economy immediately led to a tightening of global liquidity and increased investor risk aversion, reports The WP Times with reference to Telegram.
The market quickly switched into risk-off mode, as the prospect of higher returns in Japan triggered capital outflows from riskier assets, including cryptocurrencies. GeekStake identified a cascade of interconnected events: The capital shift initiated a chain reaction as investors moved funds back to Japan. Simultaneously, the continued reduction of U.S. debt purchases by China exacerbated tensions in global financial markets, adding pressure on the U.S. dollar and contributing to the overall liquidity strain.
This dual liquidity bottleneck, combined with uncertainty stemming from the geopolitical financial shifts, led to an acceleration of the price decline, as automated trading systems and algorithmic selling strategies exponentially amplified losses across BTC, ETH, and XRP. Analysts at GeekStake emphasize that these events demonstrate the close intertwining of crypto markets with traditional global economic indicators and the monetary policies of major nations.
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