Crypto market volatility is back following a massive dump and subsequent recovery for digital assets.
Crypto markets shed $70 billion in late trading on April 26. However, they had already begun to recover during the morning Asian trading session on April 27.
Liquidations Pile On
In total, there was more than $351 million in total liquidations over the past 24 hours, according to Coinglass data. Moreover, around 73% of that has occurred over the past 12 hours as panic selling ensued.
The analytics platform reported that it was the largest period of long liquidations for the past month.
Crypto Markets Recover Quickly
A massive selloff caused Bitcoin to shed 7% in an hour or so. As a result, BTC prices fell to around $27,690 a few hours ago.
Furthermore, there were $173 million in Bitcoin liquidations over the past 24 hours. This represents around half of the total liquidations. Around $78 million in longs and $58 million in short positions were liquidated in just 12 hours.
However, BTC has since recovered almost 5% from that dip to top $29,000 again at the time of writing. As a result, BTC liquidations have fallen to just $22 million over the past four hours since the panic sale.
Crypto Selloff False Alarm
An alert from blockchain analytics firm Arkham Intelligence may have catalyzed the sell-off. On April 26, it tweeted an alert that the U.S. government and Mt.Gox wallets had active transactions.
This was then shared across crypto social media resulting in a panic sale. Skittish traders thought that the BTC stash that the government holds in the Mt.Gox wallet was about to be liquidated.
When Arkham revealed that this was a false alarm, the panic subsided and crypto markets began to recover.
However, industry observers have noted that there will come a stage when the U.S. government liquidates this Mt.Gox wallet. DeFi analyst Miles Deutscher commented:
“Today was a false alarm. But at some point in the near future, the US Gov + Mt. Gox Bitcoin IS going to move. Be prepared for when it does.”
He opined that the government should just keep the BTC. “Not sure why they’d want to sell hard money into a depreciating shitcoin (USD),” he continued before adding:
“The smart thing to do would be to accumulate MORE Bitcoin, and try and reintroduce (some) kind of monetary standard after screwing things up in 1971.”
The panic dump and pump increased crypto market volatility in what has been a relatively quiet phase.
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