The past few days have seen a huge shift in the cryptocurrency space. More than $550 million was liquidated in just 24 hours. When Bitcoin fell to a weekly low, it triggered a wave of selling that caused losses in the accounts of about 170,000 traders.
Coinglass reported that its massive losses included $118 million in BTC long positions, $54 million in ETH long positions, and even a $25 million Dogecoin long position.
The surge in liquidations, along with falling market capitalization and trading volume, underscores the volatility traders are expecting, and analysts see it as part of a broader corrective pattern following Bitcoin’s recent rally to near all-time highs.
Bitcoin dominance and liquidation trends
Bitcoin’s dominance remains strong, with a current market cap of $3.23 trillion, accounting for more than 56% of the entire cryptocurrency market. The highest liquidation on the day was $4.67 million in BTC/USDT trades on Binance, which shows the high risks involved in leveraged trading.
Altcoins were not immune to the fallout, with smaller market cap coins seeing sharp declines, with the broader market losing around $100 million.
Some analysts believe that this is just another normal adjustment, as the price of Bitcoin has risen sharply by nearly 44% since the beginning of November. Currently, the Crypto Fear and Greed Index is 82, indicating that the market is still dominated by "extreme greed."
Ethereum and altcoins remain stable
While Ethereum was not immune to losses on the day, it remained resilient. Long and short liquidations of ETH positions highlighted the uncertain sentiment surrounding the second-largest cryptocurrency.
During this period, altcoins such as Dogecoin, which are often fueled by meme-driven enthusiasm, have experienced market corrections, which serves as a warning to traders looking for quick profits.
An industry analyst named Miles Deutscher has noticed that more and more traders are reactivating their wallets after not using them for a few months. They are doing this because they are interested in the possibilities of altcoins and the strong performance of Bitcoin. This increase in activity could lead to growth and volatility as the market continues to follow its usual trends.
