On Tuesday, during Asian hours, the cryptocurrency market suddenly began to sell off. As a result, the volume of the cryptocurrency market fell by another 1% – to $1.65 trillion
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The price of Bitcoin fell 2% within hours, from $43,400 to $42,500, resulting in a 24-hour drop of almost 3%. Leading altcoins – ETH, SOL, BNB, XRP – also fell by 2-4% within a few hours.
Investors were expecting a Santa Claus rally, but high financing rates caused panic among traders. The market needs to cool down to continue moving higher. Derivatives data platform Coinglass reported:
“Funding rates are going crazy. Expect huge volatility.”
Why did the cryptocurrency market suddenly start to fall?
The current situation forced traders to abandon long positions, which led to a sell-off in the cryptocurrency market. In just one hour, $40 million worth of long positions were liquidated. In total, over the past 24 hours, positions of 70,611 traders were liquidated, and the total amount of liquidations was $170 million. This included more than $90 million of longs and $79 million of shorts.
The most positions liquidated were in BTC, ETH, SOL, ORDI, XRP, SATS, AXS and 1000SATS, with ETH leading the most liquidations in the last hour.
Prices for BTC, ETH and other cryptocurrencies are falling
The price of BTC has fallen from a 24-hour high of $43,765. The asset is currently trading at $42,601. However, trading volume has increased by 41% over the past 24 hours, indicating interest from traders. This occurs as the BTC OI-weighted funding rate increases significantly.
ETH is trading at $2,237, down 1.65% over the past 24 hours. Trading volume over the past 24 hours has increased by 25%.
Meanwhile, creditors of Mt. Gox has reportedly started receiving its payments. This will force some of them to sell their crypto earnings, which could worsen the market situation.
We previously wrote that the accumulation of funds by short-term holders leads to a sharp increase in the realized price of Bitcoin.
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2023-12-26 12:10:00
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