In the past 24 hours, the crypto market experienced a significant selloff, causing the global crypto market cap to drop by over 2% from $2.57 trillion to $2.29 trillion. This decline was led by a 15% drop in the prices of Bitcoin (BTC) and Ethereum (ETH) within just 5 hours. Other altcoins, including Solana (SOL), BNB, XRP, and Cardano (ADA), also saw a decrease in their prices. Even meme coins like Dogecoin (DOGE) and Shiba Inu (SHIB), which had recently seen a huge rally, tumbled by over 25%.
The market crash was driven by a combination of factors, including the actions of Bitcoin miners and whales. According to on-chain data from CryptoQuant, there was a significant movement of BTC to exchanges, triggering the 15% drop in its price. Additionally, there were reports of Satoshi-era BTC worth $69 million being transferred to Coinbase from miner-associated addresses. This selling pressure from miners is expected to continue as the Bitcoin halving approaches.
Whales also played a role in the selloff, as Whale Alert reported massive amounts of BTC, ETH, XRP, DOGE, SHIB, LTC, MATIC, and other altcoins being dumped on exchanges. This allowed them to book significant profits from the recent market rally.
The market also saw over $1 billion in liquidations, with Coinglass data showing that nearly $1.10 billion worth of crypto was liquidated in the past 24 hours. This resulted in the liquidation of over 297,000 traders, with the largest single liquidation order of XBTUSD worth $9 million occurring on BitMEX. The liquidations were spread across both long and short positions, with Bitcoin and Ethereum witnessing the highest amount of liquidations.
Despite the market downturn, there are still positive signs in the crypto derivatives market. Bitcoin and Ethereum options remain strong, with traders making more calls than puts. There is also a significant amount of open interest in Bitcoin and Ethereum futures, with a recent shift from selling to buying resulting in a 5% gain in open interest across major cryptocurrencies.
In addition to market factors, macroeconomic factors also played a role in the recent crypto market crash. Federal Reserve officials have become more cautious about rate cuts, with Fed Chair Jerome Powell’s upcoming testimony expected to provide more insights. The US Dollar Index (DXY) has also seen volatility in recent weeks, while US Treasury yields have risen as investors look for fresh economic data.
Overall, while the recent market selloff may have caused some concern, there are still positive signs in the crypto market, particularly in the derivatives market. With a potential buy-the-dip opportunity and strong market fundamentals, the market may see a rebound in the coming days.