Cryptocurrency market faces a sharp decline, with Bitcoin, Ethereum, and meme coins suffering losses amid $1.69B in liquidations - IcoHolder.
The cryptocurrency market has entered a sharp decline, with leading assets like Bitcoin (BTC), Ethereum (ETH), and XRP (XRP) experiencing substantial price drops. This downturn has triggered widespread bearish sentiment across the market, which has led to the liquidation of $1.69 billion in leveraged positions over the past 24 hours. The majority of this liquidation came from long positions, underscoring the severe impact the bearish trend has had on bullish traders.
According to data from on-chain analytics firm Coinglass, a total of 558,704 traders were affected by these liquidations. Of the $1.69 billion in liquidated positions, $1.5 billion came from long positions, while short positions remained relatively unaffected, with only $178.21 million in liquidations. This shift highlights the pain felt by traders who had bet on further price increases, as the market quickly moved in the opposite direction.
Among the major cryptocurrencies, Bitcoin, Ethereum, and XRP have seen significant price declines. Bitcoin has dropped 2%, Ethereum has fallen 6.5%, and XRP has seen a dramatic 14.6% decrease in value over the past 24 hours. However, meme coins BONK and FLOKI have been hit the hardest. Both coins have experienced massive sell-offs, with BONK down by 22% and FLOKI plummeting 21.5% during the same period.
The decline in these assets is a stark reminder of the volatility in the cryptocurrency space, especially when it comes to meme-based tokens that can experience sharp price movements without strong fundamentals to back them.
This recent downturn comes after an extended rally that spanned the past month. During this period, several cryptocurrencies saw massive gains, with some assets climbing by as much as 100%, 200%, or even more than 400%. The rally was fueled by investor optimism, largely driven by the outcome of the United States Presidential election, which was seen as a potential positive catalyst for the market.
However, the lack of any significant price corrections during this rally left the market ripe for a pullback. The recent declines suggest that the crypto market may have been overextended, and the correction could be a natural response to the rapid price increases that occurred without any substantial consolidations or corrections.
As the market continues to bleed, the sentiment has quickly shifted from bullish to bearish. Traders are now facing heightened uncertainty, and the liquidation data indicates that many were caught off guard by the sharp drop. Unless a significant development or reversal occurs in the coming days, it seems likely that the market may continue to struggle with downward pressure.
The ongoing liquidation events serve as a reminder of the risks inherent in leveraged trading, especially in a market as volatile as cryptocurrency. As investors brace for further price swings, the focus will likely turn to the underlying fundamentals of the market and potential catalysts that could shift sentiment back toward a more positive outlook.
