$1 Billion Crypto Market Liquidation Bloodbath: Plummeting Getting Worse?

A vicious sell-off is taking place in the cryptocurrency market, with over $1 billion in liquidations wiping out long and short positions on major exchanges. A whopping $323 million in liquidations are attributed to Bitcoin, followed by Ethereum at $73.42 million and Solana at $25.72 million, at press time. As market volatility rises, traders are in shock over this huge shakeout.

The sharp decline in Bitcoin’s price has led to a wave of liquidations in leveraged positions. Traders were forced to sell their positions at a loss due to panic-selling sparked by the decline below important support levels.

The selling pressure on altcoins has increased as a result of the market as a whole following the lead set by Bitcoin in declining. The scale of the devastation is shown on the liquidation heatmap, where the worst-hit assets are DOGE ($11.42M) and XRP ($19.10M).

This suggests that traders were highly leveraged and forced liquidations sped up the decline as the price fell. There are a number of reasons for the current market turbulence.

Macroeconomic uncertainty: Because of macroeconomic pressures like economic instability and regulatory uncertainty, investors continue to exercise caution.

The large volume of liquidations indicates that traders were using excessive leverage, which increases the market’s susceptibility to sharp price fluctuations. Investors are more anxious and uncertain, as evidenced by the sharp decline in the Fear and Greed Index.

A brief relief rally may occur if Bitcoin stabilizes and regains important resistance levels. This would necessitate a slowdown in liquidation activity and a resurgence in buying interest.

Bearish scenario: If selling pressure persists, Bitcoin may continue to decline, pulling altcoins down with it.

A deeper correction could occur if market confidence does not rebound. The next significant support zone to keep an eye on is around $80,000. As the market moves through this period of high volatility, caution is still crucial. To predict the next move, traders should keep a careful eye on liquidation patterns and important support levels.

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