More than 721M in leveraged crypto bets were liquidated within 24 hours, with Ethereum, Bitcoin and XRP topping the list of the wipeout.
The global crypto market made a sharp turn on Friday, losing nearly 6.7 percent of its value and losing more than 160b in its total market cap that now stands at around 3.84 trillion, according to data provided by CoinGecko.
The decline follows four green weekly candles in a row, implying that the strong upward momentum that propelled digital assets to near-record highs is starting to falter.
Bitcoin, which had earlier risen to over $120,000, retreated to about $115,300, recording a 2.6 percent decline in the last 24 hours. Ethereum declined 1.3 percent to $3,596 and XRP experienced a sharper 3.6 percent daily decline to trade at 3.07.
The losses are after a wide market correction, which was caused by leveraged liquidations and changing investor sentiment.
Galaxy Digital Causes Shivers as it Sells Bitcoin Worth 1.5B
In addition, Lookonchain reported that Galaxy Digital has sold 10,000 BTC, or approximately 1.18b, which was a significant burden on the crypto market. It also withdrew USDT 370m on exchanges such as OKX, Binance and Bybit, which indicated further sell-offs.
Immediately after, Galaxy Digital transferred 2,850 BTC worth approximately 330.44m to centralized exchanges. This indicates that the company has not finished selling yet, and traders are preparing to see more market fluctuations in the nearest future.
ETH, BTC, XRP Hit By Huge Liquidations Amid Market Crash
CoinGlass liquidation tracker reported that more than $721m of leveraged positions were liquidated over the past 24 hours alone. Ethereum topped the bloodbath with liquidations of $163.9m, Bitcoin with $155.5m and XRP with almost $49m.
The liquidation surge demonstrates how traders who have a heavy exposure to borrowed capital can be vulnerable when prices plunge.
There was a build up of liquidation pressure during the day with almost $273m of long positions being liquidated in the final 12 hours. The biggest single liquidation position was on the BTC-USDT-SWAP market of OKX and was worth 17.35m.
The sharp decline is a normal correction to a long-term rally. The crypto market cap had just tried the $4 trillion level, and altcoins had recorded disproportionately high returns in the rally. The Altcoin Season Index has however fallen to 40, which indicates a declining trend of smaller-cap tokens against Bitcoin.
The present volatility is still largely due to institutional activity. Although the ETF flows in Bitcoin still indicate long-term bullish sentiment, rotation positions by companies like BlackRock and Fidelity are thought to be creating short-term price imbalances.
Such actions combined with macroeconomic uncertainty and profit-taking by whales have been a drag on short-term performance.
Although the retail mood has weakened, it is surprisingly high. Crypto Fear & Greed Index remains at the level of Greed, which indicates that a lot of traders still consider the correction as a buying opportunity, but not a bearish reversal.
Crypto Volatility Continues as Traders Monitor the $116K BTC Mark
Nonetheless, analysts warn that the optimism that is being displayed despite the technical weakness may result in additional downside.
Technically, Bitcoin has fallen below important support areas and traders are looking at the region of 116,000 to see whether the coin will stabilize.
Ethereum has also been struggling after a recent surge in its validator queue, which is an indication that activity on the network is cooling. XRP, in its turn, has fallen below its short-term support, and it can be expected to reach the level of 2.72 dollars in case selling persists.
Every asset did not experience losses. The top gainers list at CoinGecko featured Vine, The Innovation Game and Pepecoin, which rose 44.7%, 46%, and 35% respectively, indicating that there was some interest in niche tokens despite the overall weakness.
Some investors believe that the dip is a healthy correction, but others are cautious.
As almost 208,000 traders have been liquidated in one day and volatility increases in the top tokens, the future seems turbulent, although long-term conviction remains solid.
Disclaimer: Crypto is a very risky asset class. This article is meant to be informational and not investment advice. You may lose all your capital.
