In a surprising twist, the cryptocurrency market experienced a significant downturn on Friday, shedding approximately 6.7% of its overall value, which translated to a staggering $160 billion loss in total market capitalization. Now hovering around $3.84 trillion, the market appears to be bracing for a more turbulent phase after an impressive stretch of four consecutive weeks of bullish gains. As digital assets soared close to their all-time highs, many were eager to see how long the momentum would last, but it seems that this rollercoaster has hit some unexpected brakes.
Bitcoin, having recently etched its way past the monumental $120,000 mark, has retraced its steps back to around $115,300, marking a 2.6% dip in just 24 hours. Ethereum hasn’t fared much better, dropping 1.3% to settle at around $3,596. Meanwhile, XRP saw an even steeper decline with a daily loss of 3.6%, now trading at $3.07. The sudden drops can be attributed to a broader market correction, spurred by leveraged liquidations and a noticeable shift in investor sentiment.
To add further strain, the cryptocurrency landscape faced jitters thanks to Galaxy Digital’s hefty sell-off of Bitcoin. According to the data from Lookonchain, the company divested 10,000 BTC—worth an impressive $1.18 billion—casting a shadow over the market. Even more eyebrow-raising was their withdrawal of $370 million in USDT from major exchanges like OKX, Binance, and Bybit, suggesting more sell-off plans could be on the horizon.
Bitcoin sell-off still underway! #GalaxyDigital deposited another 2,850 $BTC ($330.44M) to exchanges 11 minutes ago. t.co/lD8tgkC4Py t.co/T3wOpRSbnw
Shortly after this, Galaxy Digital transferred an additional 2,850 BTC, valued at approximately $330.44 million, to centralized exchanges, reinforcing worries among traders that more market swings may be imminent.
As the dust settled, liquidation tracker CoinGlass revealed that over $721 million in leveraged positions were wiped out within the last 24 hours alone, signaling the precarious nature of the current market. Ethereum led the chaos with a staggering $163.9 million in liquidations, followed closely by Bitcoin at $155.5 million, and XRP contributing around $49 million. Such extensive liquidations underline the dangers that traders face when heavily invested in borrowed funds amid rapid price corrections.
A notable surge in liquidation pressure was evident; in the last 12 hours, nearly $273 million worth of long positions were cleared from the market. The largest single liquidation order occurred on OKX’s BTC-USDT-SWAP market, sizable at $17.35 million. Analysts suggest that this downturn serves as a natural retracement following a prolonged rally: just recently, the crypto market cap had made a bold attempt to breach the $4 trillion mark, with altcoins enjoying outsized gains during the bullish stretch. Interestingly, the Altcoin Season Index has since dropped to a mere 40, indicating a weakening trend for smaller-cap tokens compared to Bitcoin.
Institutional activity continues to play a pivotal role in the current market volatility. While flows from Bitcoin exchange-traded funds (ETFs) hint at long-term bullish interest, some market watchers speculate that rotation strategies by major players like BlackRock and Fidelity could be causing temporary price dislocations. Coupled with prevailing macroeconomic uncertainty and profit-taking from whales, this has added pressure to short-term performance.
Despite the bearish atmosphere, retail sentiment appears surprisingly robust. The Crypto Fear & Greed Index still sits firmly in the “Greed” territory, indicating that many investors view this dip as a prime buying opportunity rather than a signal of impending doom. However, experts caution that such optimistic sentiment—when juxtaposed with technical weaknesses—could lead to further downtrends.
The technical indicators suggest that Bitcoin has slipped beneath crucial support levels, with traders casting wary eyes on the $116,000 zone to determine if any stabilization might be on the horizon. Ethereum, too, is under scrutiny following an uptick in its validator queue—a potential sign of waning network activity. XRP has broken below its immediate support level, with analysts speculating a possible test of the $2.72 mark if selling pressure persists.
Interestingly, not all assets succumbed to losses; CoinGecko’s top gainers showcase highlights such as Vine, The Innovation Game, and Pepecoin, sporting impressive gains of 44.7%, 46%, and 35%, respectively. This indicates that while the broader market may be facing challenges, there remains selective interest in niche tokens.
As some investors interpret the current dip as a healthy correction, others remain hesitantly cautious. With nearly 208,000 traders liquidated in just one day, and heightened volatility across major cryptocurrencies, the road ahead looks anything but smooth. Nevertheless, the persistent long-term conviction among many traders continues to shine through, leaving us to wonder: how will this market saga unfold? The landscape is changing, and only time will tell what lies ahead for the crypto community.