The recent market decline sent shockwaves through the cryptocurrency industry, with hundreds of millions of dollars disappearing in a matter of hours.
Bitcoin’s price plummeted to a weekly low of $67,500 after several days of extraordinary gains and setting new all-time highs.
Altcoins also experienced a significant decline, with nearly 200,000 traders liquidating in the last 24 hours.
The weekend brought shockwaves to the cryptocurrency market, with a sudden price correction causing short-term panic and hundreds of millions in liquidated positions.
But despite the fluctuations, analysts are divided on whether this represents a broader shift in the market or just a blip on the bullish radar.
Long Crypto Squeeze Causes Liquidation
In the 24 hours ending on Friday, March 15, the capitalization of the global cryptocurrency market fell by 6%. This triggered a wave of automatic liquidations, particularly among investors with leveraged long positions – essentially big bets on rising prices.
According to Coinglass, a crypto data analytics platform, more than $800 million worth of long positions were liquidated across the market. Bitcoin itself bore the brunt of the selling pressure, falling as low as $67,000 – its lowest level in over a week.
Liquidation heatmap in the 24-hour timeframe. Source: Coinglass
The pain was not evenly distributed. More than a third of the liquidations, worth a total of $660 million, resulted from long positions in Bitcoin.
Altcoin Bloodbath follows in the footsteps of Bitcoin
The upheaval wasn’t limited to Bitcoin. The correction spread to the altcoin market, with popular tokens such as Cardano, Dogecoin, Shiba Inu, and XRP seeing significant price declines.
This, in turn, resulted in further liquidation of long positions held in these altcoins. XRP investors alone saw over $10 million liquidated, with almost $11 million of that coming from long positions.
Total crypto market cap is currently at $2.5 trillion. Chart: TradingView
Cryptocurrency Market Strikes Back: Buying the Dip
Despite the week of scares, overall cryptocurrency market sentiment remains surprisingly bullish. This is primarily due to the rapid buying activity seen at key support levels as prices decline.
For example, Bitcoin, the world’s most sought-after crypto asset, has already made a partial recovery, bouncing back to just over $69,000 at the time of writing.
A similar bounce has been seen across several altcoins, suggesting investors may see this as a buying opportunity.
Some analysts say this correction can be seen as a healthy market reset after strong growth. While some leveraged positions have gotten burned, the fact that investors are stepping in to buy the dip indicates continued confidence in the long-term potential of cryptocurrencies.
Continuing Balancing Act
The weekend’s events are a microcosm of the ongoing battle in the cryptocurrency market. On the one hand, there is a growing sense of institutional acceptance and mainstream acceptance, which fuels bullish sentiment.
On the other hand, the inherent volatility of crypto assets continues to pose a challenge, and sudden price swings can cause significant losses to unsuspecting investors.
Featured image from Pexels, chart from TradingView
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