The cryptocurrency market just experienced a turbulent week as most of the top 50 coins (excluding stablecoins) saw significant price declines. Among the top coins, Dogecoin ($DOGE) and Cardano ($ADA ) suffered the heaviest losses, while Solana, $BNB and XRP also fell into the price decline spiral.
Gloomy figures: Notable decline
• Dogecoin (DOGE): Down 12% to $0.37.
• Cardano (ADA): Plummeted 14.7% to $0.90.
• Solana (SOL): Down 10% to $227.
• XRP: Down 10.7%, at $1.33.
• Bitcoin (BTC): Down 6.1% to $92,362.
• Ethereum (ETH): Down 4.5%, at $3,324.
According to data from CoinGlass, over $691 million was liquidated in the past 24 hours, affecting more than 180,000 trading positions. Bitcoin was at the center with about $150 million liquidated, including a whale on Binance losing $4.67 million in a single trade.
The reason behind: Over-leverage
Analysts from QCP Capital point out that the market has been overbought since the US presidential election, as traders used high leverage to take advantage of the price increase. The result is an 'inevitable' correction.
In particular, the outflow of capital from spot Bitcoin ETF funds has contributed to reducing growth momentum. According to Farside Investors, on Monday alone, these funds saw outflows of up to $435 million.
What's next: PCE inflation data
PCE data: To be released before Thanksgiving, expected to show inflation may edge up slightly.
Jerome Powell, the Fed Chair, emphasized that the US economy remains in good shape, but the Fed will be flexible with future policies. The market is currently divided on the likelihood of a rate cut in December.
Overall assessment: Healthy correction or crisis?
Despite the discounts, analysts assess this as a healthy correction, not the beginning of a prolonged downtrend. The market is regaining balance after a hot growth period with excessive leverage.
It is crucial for investors to closely monitor macroeconomic signals in the coming time to make informed decisions. Will Bitcoin and the crypto market quickly recover, or will we witness more significant fluctuations? Time will tell.