In recent days, there have been significant changes in the cryptocurrency world. In just 24 hours, over $550 million was liquidated. As Bitcoin dropped to a weekly low, it triggered a wave of selling that caused about 170,000 traders to lose money from their accounts.
Coinglass reports such massive losses recorded at $118 million in BTC long positions, $54 million in ETH long positions, and even $25 million in Dogecoin long positions.
The sudden spike in liquidations, along with a decrease in market capitalization and trading volume, highlights the volatility that traders have anticipated. Analysts see this as part of a broader corrective pattern that has occurred after Bitcoin's recent price surge to near-record levels.
The Dominance Trend and Liquidation of Bitcoin
Bitcoin's dominance remains strong, with a current market capitalization of $3.23 trillion, accounting for over 56% of the total cryptocurrency market. The highest liquidation of the day was a BTC/USDT trade worth $4.67 million on Binance, indicating high stakes associated with leveraged trading.
Additionally, altcoins have not escaped the impact. Significant declines have been observed in smaller market cap tokens, with the broader market losing around $100 million.
Some analysts argue that this is just another typical correction, following a nearly 44% increase in Bitcoin's price since the beginning of November. Currently, the Cryptocurrency Fear and Greed Index stands at 82, indicating that dominance remains 'Extreme Greed' in the market.
Ethereum and Altcoins Maintain Stability
Ethereum remains resilient, despite the fact that it hasn’t escaped daily losses. The unstable sentiment surrounding this second-largest cryptocurrency is underscored by a combination of long and short liquidations in ETH positions.
Meanwhile, altcoins like Dogecoin, often driven by meme enthusiasm, have suffered the consequences of the market correction, serving as a warning for traders seeking quick profits.
An industry analyst named Miles Deutscher noted that many traders are reactivating their wallets after months of inactivity. They are doing so because they are interested in the potential of altcoins and the strong performance of Bitcoin. As the market continues on its usual trend, this increase in activity could lead to both growth and volatility.
The Path Ahead for Bitcoin
At $92,801, Bitcoin is still slightly lagging behind its all-time high of $99,750 reached earlier this month. The next actions are causing analysts to be divided; some believe the market is ready to consolidate before soaring above $100,000. Others warn that excessive leverage could lead to greater volatility in the short term.
Investors are closely monitoring market sentiment and macroeconomic factors. Although current conditions may fuel bullish momentum, the severe price volatility and significant leverage risks in the cryptocurrency market remind us of its unpredictable nature.
