The cryptocurrency market has experienced turbulence in the past 24 hours, with a staggering liquidation amount of $632 million. This total includes $436 million in long positions and $196 million in short positions. According to Phoenix Group, XRP leads with a liquidation amount of $65.32 million, surpassing Bitcoin (BTC) and Ethereum (ETH). Additionally, MOODENG also had over $11 million in liquidations, affecting both long and short positions.
These levels of liquidation send a clear warning about the volatility in the cryptocurrency market. Recent data indicates that traders were caught off guard by sudden market changes, resulting in a significant imbalance in long positions. The high liquidation figures highlight the risks of trading in such a volatile environment, emphasizing the necessity of robust risk management strategies.
Despite facing considerable volatility, Bitcoin's price remains a key driver in the market, with Bitcoin trading at $95,468 and Ethereum at $3,617 on OKX at the time of writing. Decentralized finance (DeFi) activity also remains strong, with the total value locked (TVL) in decentralized platforms reaching $192 billion.
The widely watched sentiment indicator 'Fear and Greed Index' currently scores 80, indicating 'Extreme Greed', reflecting a strong bullish sentiment compared to a score of 83 a week ago and 70 a month ago. Meanwhile, the ongoing struggle between bulls and bears continues, with BTC longs slightly trailing shorts over the past day, at 48.51% to 51.49%.
Market participants are advised to proceed with caution, especially considering the high liquidation volume and unpredictable price fluctuations. The current market sentiment, dominated by extreme greed, may further exacerbate market volatility. Analysts warn that while bullish market momentum may lead to price increases, it also raises the risk of sharp price corrections.
The recent liquidation situation in the cryptocurrency market highlights the inherent risks of leveraged trading during periods of high market optimism. As the market sails through this wave of extreme greed, it encourages traders and investors to remain vigilant, balancing optimism with strategic caution to successfully navigate future challenges.
