- Over $1 billion in crypto positions were liquidated over the weekend, with long trades taking the biggest hit.
- The total crypto market cap drops by more than 10.5%, falling to $2.5 trillion amid widespread sell-offs.
- Analysts blame uncertainty over Trump’s proposed tariffs, drawing comparisons to the 1987 Black Monday crash.
Following the bloodbath over the weekend that resulted in massive crypto liquidations, many crypto market players have labeled April 7 as crypto black Monday. Over $1 billion in short and long positions were closed out this past weekend.
More Than $1 Billion Wiped Out in 48 Hours
According to Coinglass data, nearly $117 million worth of positions were wiped out on Saturday. This included nearly $84 million in long positions and $33.02 million in short positions.
On Sunday, crypto liquidations rose to more than $850 million as more traders and investors were closed out of their positions. Similar to Saturday’s liquidations, the majority of these positions were longs at $743.115 million, a contrast to $107.881 million in shorts.
Following the massive crypto liquidations, there has been widespread pessimism in the market.
Crypto Liquidations Chart. Source: CoinGlass
Market Cap Drops By More Than 10.5%
Hence, it is no surprise that the crypto market’s overall evaluation is down by more than 10.5% at $2.5 trillion, according to CoinGecko data.
Crypto Market Cap. Source: CoinGecko
As of this writing, 9th-placed DOGE leads the crash among the top 10 cryptocurrencies by market cap and trades at $0.1386. It is closely followed by SOL, which dropped by 15.1% to trade at $101.07.
Price Drops for Top 10 Cryptos. Source: CoinGecko
When there are massive liquidations in the crypto or other financial markets, analysts are quick to make reference to the ‘black Monday’ incident of October 19, 1987, when a sudden and significant crash occurred in the stock market.
On that day, the Dow Jones’ Industrial Average (DJIA) and other major stock indices globally dropped significantly, with the former declining by almost 23%. This event was the largest single-day percentage fall of all time.
The panic created by the event led to a massive surge in trading volumes, which overwhelmed the markets. Also, the free fall continued unchecked as there was no stop to trading activities during this period of peak volatility.
What Caused This Crypto Black Monday?
Respected crypto market analysis newsletter, the Kobbiessi Letter, stated that these crypto liquidations were the market’s reaction to the lack of clarity to US president Donald Trump’s intended tariffs. The popular newsletter also predicted that the crypto market would experience a short-term capitulation this week.
Analyst Duo Nine agreed with Kobbiessi’s submissions. He added that the US president’s tariff plans could prolong bearish conditions in the crypto market and disrupt global supply chains, leading to decreased productivity.
Despite broader fears regarding the tariff plans, traditional investors could consider the current market conditions as an opportunity to invest. The market bottom is usually close by when there are gloomy forecasts about the financial markets, including the crypto market.
