Bitcoin’s flash crash causes havoc in gaming token market

The cryptocurrency market was rocked by a recent sudden plunge in Bitcoin, affecting multiple gaming-related tokens.

Bitcoin Flash Crash Causes Gaming Tokens to Plummet

Source: Adobe/nuclear_lily

Bitcoin’s recent flash crash has sent shockwaves through the cryptocurrency market, particularly impacting gaming-related tokens. On a fateful Wednesday, Bitcoin experienced a rapid decline of around 7%, setting off a chain reaction that led to gaming tokens losing anywhere from 5% to 15% of their value.

According to data from CoinGecko, Immutable’s IMX token suffered a decline of approximately 9%, while The Sandbox’s SAND token dropped by about 12%. Axie’s AXS token experienced a roughly 10% decrease, and the GALA token took a significant plunge of approximately 13%. Additional losses were seen in Merit Circle’s BEAM token and ApeCoin, which fell by 9.5% and 13%, respectively. Several other gaming tokens, including GMT token, Enjin Coin, Parallel’s PRIME token, and WAX, also experienced losses.

However, it’s important to note that these cryptocurrencies had already experienced overall declines over the past week, and their losses were exacerbated following Bitcoin’s flash crash. The crash sent shockwaves throughout the market, causing panic and further contributing to the downward spiral.

Over $500 Million in Longs Liquidated

As reported by CoinGlass, the crash led to the liquidation of over $550 million in long positions. A staggering 172,626 traders were liquidated, with total long liquidations amounting to $557 million and short liquidations amounting to approximately $58 million.

Among the exchanges, OKX accounted for the lion’s share of these liquidations at over $230 million, followed by Binance at $105 million and Huobi at around $74 million. Bitcoin-tracked futures experienced $110 million in both short and long liquidations, while Ethereum-linked futures saw over $82 million in liquidations.

Amidst the chaos and downturn in the market, a few tokens managed to make gains. Axie’s Smooth Love Potion (SLP) and Yield Guild Games’ YGG tokens saw increases of approximately 4% and 11%, respectively, seemingly unfazed by Bitcoin’s tumble. Additionally, Oasys experienced a rise of about 6.3% within the past day, joining the limited group of tokens that escaped the chilling effects of the flash crash.

While the current situation may seem challenging for lagging gaming tokens, it’s crucial to note that some of them have recently achieved notable milestones. IMX reached a 20-month high of $2.35 last month, reaching prices not seen since the bullish market of April 2022. GALA also witnessed an 18% gain during the same period, although its price has since dropped back to around $0.027, similar to mid-December levels.

Bitcoin Drops to as Low as $40,000 on ETF Delay Rumors

The record level of liquidations came as the leading cryptocurrency crashed to as low as $40,000 on rumors that the SEC is set to reject spot Bitcoin ETF applications this month. Matrixport’s report projected a January rejection, cautioning traders to hedge long exposure. The report stated, “With SEC Chair Gensler’s skepticism towards crypto, a potential -20% Bitcoin price drop is anticipated upon ETF denial, though a positive end-of-2024 outlook remains.”

🎯 Q&A

Q: How did Bitcoin’s flash crash affect gaming tokens? A: Bitcoin’s flash crash caused gaming tokens to lose anywhere from 5% to 15% of their value. Tokens such as Immutable’s IMX, The Sandbox’s SAND, Axie’s AXS, and GALA took substantial hits in their prices.

Q: Which exchanges had the most liquidations? A: OKX had the largest share of liquidations at over $230 million, followed by Binance at $105 million and Huobi at around $74 million.

Q: Did any tokens defy the market downturn and experience gains? A: Yes, amidst the chaos, Axie’s Smooth Love Potion (SLP), Yield Guild Games’ YGG, and Oasys managed to make gains.

Q: Have any gaming tokens recently achieved notable milestones? A: Yes, IMX reached a 20-month high of $2.35, and GALA witnessed an 18% gain. However, their prices have since dropped back to previous levels.

Q: Why did Bitcoin drop to as low as $40,000? A: Rumors of the SEC rejecting spot Bitcoin ETF applications this month led to Bitcoin’s decline. A negative outlook on the ETF’s fate and SEC Chair Gensler’s skepticism towards crypto caused concerns in the market.

Future Outlook and Recommendations

Given the recent volatility in the market, it’s important for investors to reconsider their strategies and reassess their risk tolerance. While the flash crash had a significant impact on gaming tokens, it’s crucial to consider the long-term potential of these assets. Some gaming tokens have shown resilience and achieved remarkable milestones in recent months, indicating that the industry still holds promise.

Investors should conduct thorough research and stay informed about industry developments. Diversifying portfolios beyond Bitcoins and gaming tokens can also help mitigate risks. Additionally, staying updated on regulations and SEC decisions regarding ETF applications can provide valuable insights into future market trends.

Overall, the cryptocurrency market remains highly volatile, and cautious and informed decision-making is essential. By considering the long-term potential, monitoring market trends, and staying informed, investors can navigate this ever-evolving landscape.

🔗 References 1. Bitcoin Miners Reduce BTC Holdings as Miner Price Nears $65K 2. Radiant Capital Halts Arbitrum Markets after Reported $45M Flash Loan Attack 3. Indonesian Police Shut Down 10 Bitcoin Mining Operations

💬 What are your thoughts on the recent flash crash and its impact on gaming tokens? Share your comments below and let’s discuss! Don’t forget to share this article with your friends on social media to spread the knowledge!

We will continue to update Phone&Auto; if you have any questions or suggestions, please contact us!

Share:

Was this article helpful?

93 out of 132 found this helpful

Discover more

Market

Bitcoin Set to Soar: Brace Yourself for the Crypto Roller Coaster!

Bitcoin price skyrocketed this year due to major financial institutions promoting spot ETFs.

Markets

Binance Labs invests in five projects in its Incubation Program Season 5.

The Incubation Program of Binance Labs is investing in the following projects Bracket Labs, DappOS, Kryptoskatt, Mind...

News

US Treasury and IRS propose crypto reporting rules for brokers

The US Department of the Treasury and the IRS have recently announced a proposed set of regulations aimed at promotin...

Bitcoin

The Thriving Bitcoin Market: Reddit’s Investment and Marathon Digital’s Innovation

Bitcoin prices buoyed by Reddit's strategic investment and Ethereum's mainstream acceptance exemplifies increasing re...

DeFi

The Rise of Digital Assets: Bitcoin Takes the Lead

The digital asset market experienced a substantial influx of $708 million during the week of Jan. 29 to Feb. 2, as re...

News

Gamee Token Contract Exploit: Lessons Learned and Market Vulnerabilities 🎮🛡️

Gaming protocol Gamee has experienced a challenging situation due to an exploit where approximately 600 million GMEE ...