Crypto Prices See Major Pullback
The cryptocurrency market experienced significant losses, with many altcoins suffering double-digit declines on Monday. Bitcoin (BTC) managed to outperform other assets but still faced a 5% drop over the past 24 hours, dipping just below $95,000. Ether (ETH) and other major altcoins followed suit, reflecting a broader downturn in the market.
Bitcoin’s Struggles Amid Broader Crypto Decline
Earlier in the day, Bitcoin had briefly surpassed the $100,000 mark before retreating sharply. By the end of the U.S. trading session, Bitcoin had settled around $96,000, marking a significant decline from its peak. Despite this drop, Bitcoin held up relatively better than many altcoins, which were hit even harder.
Altcoins Take a Bigger Hit
Ethereum (ETH) saw a 10% loss, dropping to $3,590, while several other altcoins took a heavier hit. Cardano (ADA), Avalanche (AVAX), and XRP each saw declines of nearly 20%. The broader CoinDesk 20 Index dropped more than 8%, as the overall market sentiment turned negative.
Liquidations Surge Amid Market Drop
As the market fell, over $750 million worth of leveraged derivatives positions were liquidated, according to data from CoinGlass. The majority of these liquidations were associated with bullish bets on digital assets, indicating a sharp reversal in sentiment. This event mirrored the intense selloff seen on August 5, though it was not as severe as last Thursday’s sharp plunge when Bitcoin dropped from over $100,000 to $90,000 in a matter of hours.
Market Sentiment Shifts
This downturn highlights the ongoing challenges in the crypto market, with declining trading volumes and signs of profit-taking by long-term holders. 10x Research noted that the market could be entering a consolidation phase, but this is expected to be temporary. The report emphasized the importance of traders focusing on strong, high-conviction positions and avoiding weaker segments of the market.
Market Outlook: Caution Advised
As the market moves into the holiday season, many traders are positioning themselves for sideways price action. Options traders, in particular, have been taking profits on earlier bullish bets and shifting positions to the start of the new year. While there is still long-term bullish sentiment, analysts from QCP Capital warned that short-term volatility could lead to a range-bound market until year-end.
Key Takeaways
- Bitcoin dropped 5%, falling to just above $95,000.
- Altcoins, including ETH, ADA, AVAX, and XRP, experienced up to 20% declines.
- Over $750 million in leveraged positions were liquidated across the market.
- Analysts expect a temporary consolidation phase, with caution advised for traders.
