Long-time DeFi researcher Miles Deutscher summarizes a number of reasons that might be behind the ongoing crypto bloodbath. It looks like the combination of global macro catalysts, together with major crypto-specific developments, resulted in this “perfect storm.”

From Japanese yen to Mt. Gox: What pushed crypto to multi-month lows?

Cryptocurrency analyst Miles Deutscher shares the top catalysts that caused the most dramatic crypto capitalization drop in many months. According to him, largely, this volatility spike should be attributed to geopolitical tensions across the globe and sentiment changes in the U.S. Presidential Election race.

In terms of macro economics, the unwinding of Japanese yen might also have contributed to the plummeting of crypto prices. As covered by U.Today previously, the asset added an unbelievable 10% in less than 30 days in tandem with the U.S. dollar.

At the same time, the Nikkei Stock Average 225, an index of the largest Japanese companies stocks, witnessed its worst drop since 1987 Black Monday.

Then, the pessimism of investors was triggered by the publication of alarming unemployment rates in the U.S. The unemployment rate surged to 4.3% in July, up 0.2% from June, per Friday’s BLS report.

Accelerated recession fears take over the market as the heated debate rages about the necessity of emergency U.S. Fed rate cuts in August or September.

However, the “crypto-native” bearish catalysts also did their job. The overall effect of Mt. Gox compensation distribution is yet to be seen while major trading firm Jump Crypto might be selling its positions.

$27 million lost in single BTC long liquidation today

In recent days, Jump Crypto was allegedly unstaking over 120,000 wETH from Lido Finance to sell them immediately.

Also, a mysterious Solana whale yielded $120 million in SOL from various validators and sent the coins to Coinbase Prime, Colin Wu says.

As such, the market is in the middle of its most painful drawback in months. A total of $1.2 billion in crypto positions, the highest from mid-April, were liquidated in last 24 hours; 85% of them were longs.

The largest single liquidation was registered on Huobi: a trader saw his $27 million Bitcoin (BTC) long position erased today, according to CoinGlass data.