Cryptocurrency Market Experiences Liquidation Valued at $1 Billion during Intense Altcoin Downturn
The crypto market has witnessed a profit-taking phase over the past 24 hours, resulting in a drop of nearly 10% in the altcoin market cap from $1.57 trillion to $1.4 trillion. This correction, which saw almost $1 billion in liquidations, has primarily affected short-term leveraged traders who had bet on continued price rises.
In the last 24 hours, Ethereum, the second-largest cryptocurrency, traded a volume of $50.17 billion. The digital asset surged 63% over the past month, with Asian trading hours contributing a 96% gain. However, Ethereum saw selling pressure in European and U.S. sessions, with respective declines of 26% and 7% during the same period.
Bitcoin, the leading cryptocurrency, recorded a 16% overall gain, with Asian market activity accounting for a 25% increase. Despite the altcoin sell-off, Bitcoin stayed around $118,000, showing relative stability. This was partially attributed to large-scale BTC transfers by institutional players, which acted as safe-haven flows mitigating broader market volatility.
The recent correction comes amid discussions of 'altcoin season', a period in the crypto market when altcoins outperform Bitcoin. However, it is being viewed as a routine profit-taking phase rather than a signal of a broader downtrend.
Experts like Michaël van de Poppe emphasize that volatility remains elevated since altcoins have not yet reached their previous all-time highs. He suggests traders either capitalize on this volatility or remain patient, as the altcoin bull market is still in early stages.
PlanB, the founder of the stock-to-flow model, stated that this is common in a Bitcoin bull run. He notes that such corrections are healthy and expected, serving to shake out overleveraged and momentum-dependent traders.
Following the correction, Bitcoin entered a sideways trading phase, while major altcoins like Ethereum, Solana, XRP, and TRON showed early signs of recovery. Experts advise traders to watch for potential breakout or trend reversal opportunities amid shifting momentum.
In summary, experts interpret the recent altcoin correction as a short-term market shakeout that penalized overleveraged and momentum-dependent traders but did not end the bullish cycle. They view it as a phase of recalibration within a still-positive crypto market environment, advising caution and strategic patience for short-term traders.
[1] van de Poppe, M. (2022). Twitter Post. https://twitter.com/CryptoMichNL/status/1519366668069922816 [2] Coinglass. (2022). Liquidation Data. https://coinglass.com/liquidations [3] NewsBTC. (2022). Altcoin Market Cap Drops 10% as Bitcoin Enters Sideways Consolidation. https://www.newsbtc.com/news/market/altcoin-market-cap-drops-10-as-bitcoin-enters-sideways-consolidation/ [4] Cointelegraph. (2022). Bitcoin, Ethereum, and Altcoins Correct as Market Sheds $378 Billion in 24 Hours. https://cointelegraph.com/news/bitcoin-ethereum-and-altcoins-correct-as-market-sheds-378-billion-in-24-hours
Finance and investing are critical aspects to consider during this current altcoin correction. For instance, experts like Michaël van de Poppe suggest that this volatility could present trading opportunities, urging traders to capitalize on it or remain patient as the altcoin bull market is still in its early stages. Similarly, PlanB, the founder of the stock-to-flow model, views such corrections as healthy and expected, providing a chance to shake out overleveraged and momentum-dependent traders, thereby maintaining the bullish cycle.
