The crypto market recently faced a dramatic downturn, losing more than $700 million in leveraged positions over a day. Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), Dogecoin (DOGE), and Plasma (XPL) saw significant losses. This wave of selling hit traders hard as volatility and global economic issues persist.
Over 180,000 traders faced forced closures of their leveraged positions, according to On-chain Lens data. Bitcoin alone saw liquidations over $160 million, while Ethereum lost about $170 million. Solana, XRP, and Dogecoin also suffered, with liquidations of $48 million, $25 million, and $20 million respectively.
These liquidations worsened the price drop, pushing Bitcoin below $121,000. The current sell-off is partly due to profit-taking after recent highs. Bitcoin recently hit over $126,000, encouraging investors to withdraw profits. Similar moves were seen in Ethereum and other altcoins.
Analysts observe that such corrections in Bitcoin and Ethereum prices are common after long rallies. However, the volume of liquidations intensified the decline. Michaël van de Poppe mentioned potential buying opportunities during this pullback.
Broader concerns, notably about a potential AI bubble, also affected the market. Poor performance in tech stocks like Oracle and Nvidia worried investors, spreading caution across risk assets, including cryptocurrencies.
The ongoing U.S. government shutdown adds to the uncertainty, potentially delaying regulatory approvals for altcoin ETFs such as XRP and Solana. While Bitcoin is often seen as a safe haven, the current economic disruption pressures altcoins and speculative assets.
Following the $700 million liquidation, crypto prices have dropped. Bitcoin is at $121,679 (down 1.6%), Ethereum is at $4,465 (down 4.2%), XRP at $2.86 (down 3.7%), Solana at $221.78 (down 3.5%), Dogecoin at $0.2469 (down 4.7%), and Plasma at $0.8751 (down 12%).
Investors remain cautious as they consider potential recoveries against ongoing risks and market volatility.
Why is the crypto market down today? The market is down due to massive leveraged liquidations, profit-taking after highs, and broader AI sector fears.
Is now a good time to buy the crypto dip? Some analysts see this correction as a buying opportunity, but caution is advised due to volatility and economic uncertainty.
Will crypto prices recover? Historically, sharp corrections are common in bull markets. Recovery depends on stabilizing market conditions.
