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The cryptocurrency market got a rise in instability over the weekend, as all of the top 10 largest cryptos by market capitalization traded down. In addition to regular weekend instability, the downturn was caused by operations in both the derivative and cash markets.
The cryptocurrency market is lower today, with total market capitalization decreasing by 1.33% to $2.3 trillion in November. At press time, the market was showing signals of recovery, but the total market capitalization stayed down 0.47% in 24 hours to $3.35 trillion.
Long Liquidations of $360M Led to a Downtrend
Coinglass data indicates that in just 24 hours, the total price liquidated in the cryptocurrency market hit $489 million. These liquidations affected around 186,000 merchants.
Traders with massive long positions took the biggest hit, losing about $360 million. Bitcoin liquidations reached $56 million, the most in a single day in more than a week.
At the same time, Ethereum and Dogecoin faced the greatest liquidations among altcoins, with $32 million and $21 million taken out, respectively. When long traders are liquidated, they are compelled to close their positions by selling. As a result, this scenario has caused the recent economic downturn.
Profit-Taking Activity
As previously said, weekends are usually linked with low trade volumes. As a result, even a tiny rise in buying or selling activity can have a big impact on price.
According to CryptoQuant data, over 74,000 BTC were transferred to actual exchanges in the last three days. These inflows show that some traders are looking to make profits after recent advances.
Furthermore, around 19,238 BTC was transferred into exchanges over the weekend. Possible selling activity applying these deposits may have caused a drop in Bitcoin prices and, by extension, altcoins.
Market Sentiment Still Indicates Greed
Despite a recent fall, the market mood stays positive. This is prominent in the Fear and Greed Index, which has a value of 82, showing "extreme greed."
While this statistic indicates traders' excitement and confidence, it can also show an upcoming correction or trend reversal. As a result, traders should look for proof of strong profit-taking, since this might cause more declines.
Key Factors
- The cryptocurrency market noticed more than $489 million in total liquidations as Bitcoin and a large number of altcoins fell.
- The downturn was caused by forced selling and profit-taking due to heavy liquidations.
