Market participants are wondering what caused this significant disturbance, as the crypto market saw an astounding $138.57 million in liquidations in the last 24 hours, according to recent data from Coinglass.

When the market moves against leveraged holdings, they are compelled to close them on several cryptocurrency exchanges, a process known as crypto liquidations. Put simply, exchanges automatically sell a trader's assets to cover losses when their value drops below a predetermined threshold, triggering a liquidation event.

Coinglass data showed that total liquidations during the 24-hour period were $138.57 million, of which $120.17 million represented long positions and $18.40 million represented short positions.

The two largest victims of the liquidation wave were Bitcoin (BTC) and Ethereum (ETH), with Bitcoin leading the way. In the last 24 hours, there have been $25.68 million in liquidations on Bitcoin, with long traders losing $6.39 million and short traders losing about $2.98 million. Ethereum saw even more severe losses, with a $37.06 total liquidation amount.

At present, Bitcoin is down 2.43% at $40,722.72, while Ethereum has dropped 4.07% to $2,372.45 in the same time period. Remarkably, even the recently introduced MANTA tokens, which were made available by MANTA Network, experienced a slight liquidation of $1.95, demonstrating the market's extensive effects.

Analysis of the market and underlying reasons

A number of variables have contributed to increased volatility, which has been associated with the recent market instability. One possible trigger, according to analysts, might be the SEC's approval of numerous spot Bitcoin Exchange-Traded Funds (ETFs). Within the 12 days that followed the approvals, the value of Bitcoin dropped by more than 7%, from over $48,000 to about $43,000.

Based on Glassnode's on-chain analytics, it appears that a combination of spot profit-taking and derivatives leverage may have caused the price decline. Nonetheless, a number of indicators in the derivatives and on-chain domains suggest that a significant segment of Bitcoin investors saw the ETF clearance as a chance to sell the news.