Massive Shakeout Rocks Cryptocurrency Market Ahead of Christmas
The cryptocurrency sector experienced a significant disturbance on December 20, just before the Christmas holidays, leading to severe financial repercussions for traders. In the past 24 hours alone, the market saw over $1.4 billion worth of positions being liquidated, creating turmoil in trading circles.
Extensive Liquidations Decimate Crypto Traders
Data collected by Finbold from CoinGlass reveals that a staggering 427,593 traders faced liquidations from Thursday to Friday morning. The total liquidations amounted to an astonishing $1.40 billion, with $1.21 billion originating from long positions.
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Unprecedented Liquidation Surge
A significant portion of these liquidations, totaling $505.10 million, occurred in the last four hours, causing many crypto projects to fall below critical support levels. This triggered a wave of panic selling across global exchanges.
Bitcoin and Ethereum Lead the Liquidation Frenzy
Bitcoin (BTC) and Ethereum (ETH) were at the forefront of this financial rout, contributing liquidations of $326.23 million and $307.79 million, respectively. Ethereum experienced the largest single liquidation order on Binance against Tether’s USDT, resulting in a $15.80 million long position being wiped out.
Crypto Projects Suffer Over $400 Billion Market Cap Loss
The TradingView Crypto Total Market Cap Index (TOTAL) indicates that the market experienced a massive contraction, with over $400 billion disappearing within the same 24-hour period—a decline of 11.61%.
Market Cap Dips Dramatically
As of the latest figures, the TOTAL index stands at a $3.08 trillion market capitalization, having briefly touched a low of $3.05 trillion. This sharp fall comes after peaking at $3.71 trillion on December 17, representing a 17% decline.
Varied Performance Across Cryptocurrencies
While most cryptocurrencies recorded losses, Bitcoin managed to outperform the index. Conversely, memecoins have emerged as the largest casualties in this market downturn, suffering substantial losses.
Market Sentiment and Analyst Reactions
Amidst this financial upheaval, crypto analysts and traders have taken to social media platforms like X to share insights and express concerns, underscoring the need for caution during these uncertain times.
Increased Enthusiasm for Buying the Dip
With Bitcoin’s price dipping to $95.5K, discussions about buying the dip have surged to their highest levels in over eight months, echoing sentiments last seen during a major market crash on August 4th.
While some investors see this as a buying opportunity, there’s no consensus on whether further declines will occur, necessitating vigilant risk management as fear, uncertainty, and doubt (FUD) linger over the market’s future trajectory.
Overall, the prevailing advice is to exercise caution with leverage, emphasizing spot purchases for those maintaining a bullish outlook.
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