Crypto Market Volatility Sparks $200 Million Liquidations: Bitcoin and Altcoins Experience Rollercoaster Ride

Crypto Market Volatility Sparks $200 Million Liquidations: Bitcoin and Altcoins Experience Rollercoaster Ride

Crypto News – The crypto market‘s volatility resulted in liquidations exceeding $200 million in crypto-tracked futures, with long positions, totaling $150 million, bearing the brunt of the losses as they bet on higher prices.

This week, the crypto market witnessed a flurry of activity characterized by prices surging to multi-month highs, followed by a swift downturn and subsequent recovery. The turbulence was fueled by traders capitalizing on profits and the anticipation surrounding chipmaker Nvidia’s earnings report, which ultimately surpassed expectations.

Bitcoin (BTC) took a hit, plummeting to $50,700 late Wednesday, while Ethereum (ETH) dipped just below $2,890 before bouncing back to $51,600 and $2,993, respectively, at the time of writing.

Among major altcoins, Polygon’s MATIC experienced the most significant losses, dropping 7%, followed by Cardano’s ADA and XRP, which both saw declines of up to 5%. Despite the downturn, the entire market capitalization dipped momentarily before rebounding to around $2 trillion, reflecting a 2.18% increase over the previous day.

In terms of trading volume, the ecosystem currently boasts a total market volume of $82.33 billion, indicating a 10.35% decrease in the past 24 hours.

The market’s volatility resulted in over $200 million in liquidations of crypto-tracked futures, with long positions accounting for $150 million. Short positions, which bet on lower prices, also felt the impact, albeit momentarily, as the market recovered following Nvidia’s financial earnings report for the last quarter of 2023.

The recent volatility also impacted AI tokens, which experienced heightened activity following the introduction of OpenAI’s Sora product the previous week. The total market capitalization of AI tokens exceeded $15 billion, with Worldcoin’s WLD reaching an all-time high.

The Beginning of an Altcoin Season

According to a CoinDesk report, some cryptocurrency traders had anticipated the sell-off, viewing the recent decline as a correction rather than indicative of a broader market trend. Alex Kuptsikevich, a senior market analyst at FxPro, a brokerage company headquartered in London, characterized the recent market decline as a correction of the month’s rally, during which BTC reached $53,000 for the first time in two years.

“Bitcoin has managed to avoid a significant sell-off, although it hasn’t replicated the upward momentum observed in recent days. Technically, Ethereum’s pullback to $2,700 is a correction of this month’s rally and should not be cause for much alarm. However, a break below these levels could be cause for concern for these assets,” he explained in an email to CoinDesk.

While some analysts, like Kuptsikevich, believe that the recent movements in the crypto market are merely corrective, the industry remains divided regarding the onset of an altcoin season.

Another analyst, Markus Thielen, head of 10x Research, emphasized Bitcoin’s continued dominance, currently at 51% of the market share, as a pivotal factor. He suggested that dominance would need to fall below 45% for the altcoin season to commence, signaling a potential shift in capital toward other tokens.