The cryptocurrency market experienced a significant crash recently, resulting in a 5% drop in the global market cap to $1.05 trillion within the last 24 hours. Over 170,000 traders were liquidated, amounting to a total liquidation value of $350 million. The largest individual liquidation occurred on the OKX exchange, involving an ETH-USD-SWAP valued at $2.18 million.

Bitcoin, the leading cryptocurrency, witnessed a 5% decline, reaching a 24-hour low of $25,500. Currently, Bitcoin trades near $25,600, and there is a high likelihood of it dropping below the $25,000 level.

Ethereum, the second-largest cryptocurrency, experienced a 4% decline, with its 24-hour low and high at $1,765 and $1,854, respectively. Presently, ETH trades below $1,750, and selling pressure persists, accompanied by increasing trading volumes.

Altcoins like Filecoin, Polygon, Cardano, Solana, Chiliz, Sandbox, Decentraland, and Axie Infinity, among others, plummeted by more than 20%. Shiba Inu (SHIB) led the crypto market crash by falling 30% in the last 24 hours. However, some investors took advantage of the price dip and engaged in buying.

The crypto market crash can be attributed to several factors. One significant factor is the substantial liquidations associated with cryptocurrencies mentioned in lawsuits filed by the US Securities and Exchange Commission (SEC) against Coinbase and Binance. Furthermore, the liquidation surge was triggered by Binance.US ceasing USD fiat support and Robinhood delisting Solana (SOL), Cardano (ADA), and Polygon (MATIC).

The SEC identified several cryptocurrencies as securities in the Binance lawsuit, including BNB, BUSD, SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI. In the Coinbase lawsuit, the SEC listed SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO as securities.

According to Coinglass, approximately $300 million in long positions and $25 million in short positions were liquidated within the last 24 hours. The majority of these liquidations occurred on Binance, OKX, and Bybit, involving cryptocurrencies such as BTC, ETH, ADA, SOL, DOGE, LTC, FIL, and MATIC.

Grayscale Investments also made a request to the SEC, seeking the withdrawal of the Trust's Registration Statement on Form 10 for the Grayscale Filecoin Trust. The SEC continues to consider Filecoin (FIL) as a security, while Grayscale maintains its belief that FIL is not a security.

Market makers, including Jump Crypto and Cumberland, withdrew liquidity from altcoins, leading to a significant sell-off on Binance and Coinbase. Binance.US partners have shown reluctance to collaborate with the exchange, further contributing to the market downturn.

Additionally, there was a transfer of over 4 trillion Shiba Inu (SHIB) tokens, worth millions, from Shiba Staking to the Binance cryptocurrency exchange. This event triggered a sell-off in SHIB and BONE prices.

“Our fund has made the strategic decision to liquidate our crypto holdings and return the capital to our esteemed LPs. We believe this move will provide enhanced stability and opportunities.”

Scimitar Capital, the hedge fund rumored to be responsible for a massive $2 billion altcoin liquidation, announced their strategic decision to liquidate crypto holdings and return the capital to their investors, citing enhanced stability and opportunities as the motive behind the move.