The crypto market has exhibited signs of correction, with the majority of the coins trading in the red zone. Bitcoin, the largest cryptocurrency declined by over 5% in the last 24 hours to trade at $92,270.
Similarly, the flagship altcoin, Ethereum (ETH) lost about 4.14% of its value to trade at $3,323 at the time of writing. This occurrence is mirrored across the altcoin market, triggering a 6.36% decline in the global crypto market valuation, to $3.15 trillion. Investors are curious to know the reason behind the sudden drop. Find out below
Why Bitcoin and the Crypto Market is Down
Several factors have triggered the drop in crypto prices today, some of the most notable ones include;
Heavy Liquidation Rocks Market
The entire crypto market was hit with a significant wave of liquidation, with about $684 million wiped out in the last 24 hours. According to data from Coinglass, long positions suffered the most with about $569 million wiped out. Short positions, on the other hand, saw $115 million Rekt.
Source: Coinglass
Moreover, Coinglass data pointed out that 222,094 traders were liquidated over the last day, with the largest single liquidation happening on Binance where $4.67 million of the BTC/USDT pair was wiped off. Consequently, traders were forced to close their positions, leading to downward pressure on the prices of tokens.
Traders Cashing Out Profit
Bitcoin consistently smashed new highs, jumping from below $70k to its new all-time high of $99,645, reached on November 22. Following this, traders began selling their coins to cash in on already accumulated profits.
According to recent reports, more than 74,000 Bitcoins were moved to centralized exchanges, underscoring the notion of traders selling off their holdings. Out of this number, 19,238 BTC were moved to exchanges over the weekend, adding to the selling pressure that caused the recent decline.
Expiring Derivatives
A recent report showed that about $9.4 billion worth of Bitcoin options, and $1.3 billion of Ethereum options were expiring. This forced traders to adjust their positions contributing to the market decline.
It is also important to know that Bitcoin exchange-traded funds (ETFs) saw significant outflows. As per Soso Value data, Bitcoin ETFs recorded a daily total outflow of $438.38 million as of November 25.
Source: Soso Value
However, the general market mood remains positive as evident in the crypto fear and greed index data. The metric, used to measure the overall investor’s sentiment, points at 79, reflecting ‘extreme greed.’ This means that investors are still overall confident in the trajectory of the market.
The post Here is Why the Crypto Market Down Today appeared first on Coinfomania.
