The cryptocurrency market has experienced significant declines due to excessive leverage, and analysts believe this is a necessary correction.
This week, almost all major cryptocurrencies have reported losses, with Dogecoin and Cardano experiencing the largest declines among the top ten digital assets.
Market Outlook: Necessary Corrections in Cryptocurrency
In the face of signs of excessive leverage, the cryptocurrency market is moving forward, with many analysts viewing it as a necessary short-term correction. After a long bull market, the current bearish wave has led major cryptocurrencies to lose significant value. In particular, the prices of the top 50 cryptocurrencies have fallen; only stablecoins have maintained their value. Recent data indicates that price fluctuations will become more systematic, potentially paving the way for healthier market conditions.
Impact on Major Cryptocurrencies: Dogecoin and Cardano Hit Hard
Among the severely impacted cryptocurrencies, Dogecoin (Big Dog) and Cardano (Ada) performed the worst; these two cryptocurrencies plummeted by 12% and 14.7% respectively within less than 24 hours. Following closely were Solana (SOL) and Ripple, which also suffered significant losses, highlighting the overall instability of the market. The leading cryptocurrency Bitcoin (BTC) was also affected by this process, experiencing a drop of 6.1% to $92,362. On the other hand, Ethereum's price fell by 4.5% to $3,324. This decline highlights how fragile the seemingly unshakeable market momentum has been in recent weeks.
Forced Liquidation Information: Financial Impact on Investors
The scale of the decline is not just measured by price drops; forced liquidation data shows a disturbing trend, indicating that a total of over 180,000 positions were wiped out, amounting to $691 million. A significant portion of this figure is due to forced liquidation of long positions by Bitcoin investors, resulting in approximately $150 million in losses.
In the coming days, investors are preparing for important macroeconomic data that may further impact cryptocurrency prices. People are awaiting the minutes from the last meeting of the Federal Reserve's Open Market Committee (FOMC). Analysts are paying attention to the Fed's wording regarding interest rates and inflation; this is an important indicator for gauging future market trends. Additionally, the upcoming Personal Consumption Expenditures (PCE) data is expected to reflect a slight increase in inflation, which has sparked mixed feelings among investors regarding a potential interest rate adjustment in December.
