Note that this is not the first time we've talked about the losses due to the current collapse of the cryptocurrency market. In particular, this week was particularly painful for LUNA investors, which lost nearly 100 percent of its value.

We have clarified the current data. Today LUNA is trading at $0.00018076, though exactly one month ago its rate was equal to $76. Taking this into account, the results of the asset's value behavior in different time intervals are as follows.

LUNA cryptocurrency value in different time periods

A rapper and YouTube blogger with a pseudonym KSI suffered massive losses due to this cryptocurrency. He lost less than $3 million, and he bought crypto after the first drop. In other words, he was hoping for rebound and normalization of situation, however crypto just went to look for price bottom. Read more about the situation in a separate article.

How much money lost on cryptocurrencies

The week before, the volume of liquidated positions was $542 million, which means that in just seven days, the amount of traders’ losses almost doubled. According to Decrypt’s sources, the cascade of liquidations was caused by the collapse of the entire crypto market amid the collapse of stocks and other components of the traditional economy. Between May 8 and May 14, the price of Bitcoin fell from $35,500 to $30,100. Over the same period, the capitalisation of the crypto market fell by more than $300 billion.

Volume of liquidations of long and short positions against the background of the Bitcoin price chart

Recall, liquidation occurs when a trader is forced to close a long or short position in an asset that is moving in price contrary to their expectations. Market players betting on Bitcoin derivative products in the form of futures, options and perpetual contracts can fall into liquidation when there are no longer enough funds on their balance sheet to secure a loan from the exchange if the price of the asset moves unfavourably.

In a long position, the trader expects the value of the asset to rise. Conversely, with a short position he expects the value of the asset to fall over a period of time. If the trader believes the price will go up - and it does - he can sit back and take profit. But if the price falls, the trader will have to invest more money to maintain the position or liquidate the collateral, i.e., lose money. Liquidation puts pressure to sell Bitcoin, which can lead to further price declines and, in turn, to a whole cascade of liquidations, i.e. similar forced sales.

Bitcoin exchange rate

At the moment, Bitcoin’s price is balancing at the psychologically important level of $30,000. At the same time, the crypto-community has a very pronounced panic about the potential continuation of the fall in the value of the coin up to 20 thousand dollars. Possible reasons for this are uncertainty in the global economy, geopolitical problems and the situation in traditional finance, which is also far from stable growth.

However, some analysts believe that the bears’ “overly optimistic” forecasts may well fail to materialise. Among them is a crypto-enthusiast under the pseudonym Credible Crypto. Here’s his argument from Twitter in favor of a possible continued rise in BTC and other coins.

The argument for falling as low as $13,000 is built on the basis that past major bear markets have resulted in an 80 percent drop in value from its peak. It makes the basic assumption that the $65,000 line was the top of a bull cycle. This is the same assumption that people made at the $30,000 level last June before Bitcoin jumped to $69,000 three months later.

Unfortunately, quotes like this do nothing to undo the panic. It's easy to trace its heat in the Fear and Greed Index from the Alternative portal. Yesterday it fell to 8 points out of a possible 100, which shows the extreme fear of the market participants because of the prospects of another fall. The last time the index reading was this low was in March 2020 - when the price of Bitcoin fell to nearly $3,500 due to the pandemic.

Fear/readiness index movement from the Alternative


We believe that traders and crypto investors won't be able to forget the collapse of the coin market in May 2022 for a long time to come. Judging by the fear index, their condition is now similar to the situation in spring 2020, when the global economy collapsed due to a pandemic. And that time, digital assets not only recovered, but also began a prolonged and powerful bull run. Will the same thing happen this time? We hope to have an answer soon.

Is it worth accumulating Bitcoin during such a period of time? Share your opinion on the matter in our millionaires’ cryptochat. There we discuss other important news from the world of blockchain and decentralisation.