Cryptocurrency prices witnessed a pronounced selling wave on Tuesday, leading to a substantial decline. What’s unfolding in the market?
Cryptocurrency values experience a steep decline
The crypto market witnessed a sudden widespread sell-off on Tuesday, causing the global crypto market value to drop to $1.65 trillion. Bitcoin’s price plummeted from $43,400 to $42,500 within hours, marking a nearly 3% decline in 24 hours. Major altcoins, including ETH, SOL, BNB, and XRP, also experienced 2% to 4% declines in a short span.
Despite expectations of a Santa Claus rally, elevated funding rates instigated trader panic, prompting a need for the market to cool down for sustained upward movement. Coinglass, a derivative exchange data platform, highlighted the concerning surge in funding rates, anticipating significant fluctuations.
Traders reacted by abandoning long positions, triggering a widespread sell-off that resulted in the liquidation of $40 million in long positions within an hour. In the past 24 hours, 70,611 traders faced liquidation, totaling $170 million. This included liquidations of over $90 million in long positions and over $79 million in short positions.
BTC, ETH, SOL, ORDI, XRP, SATS, AXS, and 1000SATS ranked among the most liquidated assets in the last 24 hours, with ETH standing out in the last hour. Meanwhile, reports indicate that Mt. Gox creditors have begun receiving Bitcoin payments, potentially prompting some to sell their gains, while miners closely monitor the activity.
Bitcoin (BTC), Ethereum (ETH), and Various other Cryptocurrency Prices are Dipping
According to COINOTAG, the imminent annual options expiration event on Friday carries significance, as nearly half of the Bitcoin and Ethereum option positions are set to expire. Amidst elevated funding rates, traders may contemplate adjusting their positions, taking into account factors such as the potential approval of the spot Bitcoin ETF, Bitcoin’s halving, and anticipated technical chart patterns.
BTC’s price dropped from the 24-hour peak of $43,765 to its current level of $42,430. Notably, trading volume surged by 26% in the last 24 hours, suggesting increased trader interest. The BTC-weighted open interest ratio also experienced a rise. Meanwhile, ETH is trading at $2,225, reflecting a decline of over 2% in the last 24 hours, accompanied by a slight increase in trading volume.
