Significant Losses in Cryptocurrency Markets: Traders Liquidate Over $1.7 Billion in One Day
The total market capitalization of cryptocurrencies globally experienced a 4.11% decline, dropping to $3.47 trillion. However, trading volume soared by 114.40% to $352.9 billion, in response to increased market volatility.
Experts in the field suggest that the anticipated surge in alternative cryptocurrencies (altcoins) may face delays due to the current shift in sentiment and the uncertain market environment.
Market Turmoil: Liquidation of $1.71 Billion
The recent downturn in the crypto market has led to unprecedented losses, causing distress among traders.
Insights from Coinglass indicate that within the last 24 hours, the highest level of liquidation occurred, impacting a significant number of traders since the beginning of the current market cycle.
According to Coinglass:
“In the last 24 hours, 569,214 traders faced liquidation, resulting in total liquidations reaching $1.71 billion.”
This intense market reaction hints at potential further declines, particularly for altcoins. The widespread panic selling has diminished market confidence as traders hurry to protect their profits amidst escalating volatility.
Analysts warn that altcoins might require time to revive their momentum, as the current sentiment suggests that the market is not yet ready for a recovery.
Altcoins Struggle as Bitcoin Dominance Increases
Bitcoin [BTC] dominance (BTC.D) surged in the past 24 hours, climbing to 57.90% from 56.86%. This surge indicates a shift in market dynamics, with Bitcoin gaining more control over the crypto market.
The rise in Bitcoin dominance was triggered by a rebound from the 55.26% support level, which remained strong and bolstered Bitcoin’s renewed vigor.
Typically, a drop in BTC.D suggests strength in altcoins, often leading to rallies. Conversely, a rising dominance chart signifies capital flowing back to Bitcoin, leaving altcoins grappling to sustain their momentum.
If the upward trend in Bitcoin dominance persists, altcoins may encounter further losses, extending the current bearish trend.
ETH and DOGE Lead with $350 Million Liquidated
Ethereum [ETH] and Dogecoin [DOGE] faced the brunt of the recent market decline, documenting the highest liquidation losses among altcoins, as per Coinglass data.
Collectively, these two assets witnessed a reduction of $350.56 million, with ETH accounting for $249.48 million and DOGE contributing $101.08 million. These liquidations transpired as the market swiftly moved against traders’ expectations, prompting the closure of positions.
Long investors suffered the most, with losses of $213.28 million on ETH and $83.13 million on DOGE. This underscores a market heavily tilted towards bearish sentiment.
A potential recovery would necessitate a renewed demand for these assets, possibly driven by significant investors (whales) seizing the opportunity to amass holdings at lower price levels. If such an activity materializes, a rebound might occur sooner than expected.