Crypto Markets See $1.7B Liquidation Bloodbath, Longs Take $1.6B Hit

Market Overview - A historic $1.7 billion was liquidated from the crypto markets in the past 24 hours due to macroeconomic factors and uncertainty, leading to an abrupt correction after weeks of upward momentum [1][2] - Major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), and Solana (SOL) experienced significant declines, with Bitcoin posting double-digit losses and Ethereum suffering around 8% drop [2] Liquidation Details - Of the total liquidations, $1.615 billion was from long positions, with Ethereum experiencing the largest losses at approximately $483 million in just 12 hours, followed by Bitcoin at $276 million [3][7] - The overall market sentiment is cautious as investors navigate through an uncertain September, which is historically the worst-performing month for crypto market returns [7] Market Conditions and Predictions - Prior to the U.S. Federal Reserve's rate cut announcement on September 17, crypto markets were bullish, but subsequent recession fears led to bearish pressure [4] - Analysts predict a potential second rate cut by the Federal Reserve in October, which could influence market recovery and shift from "Redtember" to "Uptober" [4][7] - Historical data shows that ten out of twelve Octobers since 2013 have been bullish, with the last six experiencing considerable market rallies [5] Treasury and Liquidity Impact - The U.S. Treasury is working to refill its General Account to $850 billion by offloading Treasury Bills and bonds, which could impact liquidity in the stock and crypto markets [6][8] - Once the Treasury General Account is refilled, the drain on liquidity may stop, although it remains uncertain if new liquidity will enter the market as a result [8]