Key Points
- The cryptocurrency market experienced a significant drop, with over $489 million in total liquidations.
- Bitcoin and Ethereum saw significant price swings, while market sentiment remains largely bullish.
The cryptocurrency market witnessed a substantial decrease, with over $489 million in total liquidations following a plunge in Bitcoin and most altcoins.
This forced selling was primarily driven by long liquidations and profit-taking, which collectively fueled the downward trend.
Market Volatility and Price Decline
The top ten largest cryptos by market capitalization traded lower, leading to a surge in market volatility over the weekend. Despite signs of recovery, the total market cap was still down by 0.47% in 24 hours to $3.35 trillion.
Bitcoin experienced violent price swings, oscillating between $95,700 and $98,600 in the last 24 hours. Similarly, Ethereum, the largest altcoin was down by 1.39% to trade at $3,383.
Apart from the surge in volatility, several other factors also contributed to the price decline.
Impact of Liquidations and Profit-taking
Data shows that in just 24 hours, total liquidations across the crypto market reached $489 million, affecting more than 186,000 traders. Traders with leveraged long positions suffered the most, with more than $360 million being wiped out.
Bitcoin recorded $56 million in liquidations, marking the largest single-day long liquidations on BTC in over a week. Ethereum and Dogecoin saw the highest liquidations among altcoins, with $32 million and $21 million being wiped out, respectively.
The scenario of long traders being forced to close their positions through selling added fuel to the recent downturn.
Data also shows that more than 74,000 BTC have been moved to spot exchanges in the last three days. These inflows suggest that some traders are keen on taking profits after the recent gains.
Despite the recent correction, the market sentiment remains bullish, with the Fear and Greed Index showing “extreme greed.” This metric indicates that traders are highly optimistic and confident, but it can also hint at an upcoming correction or trend reversal.
