The crypto market took a sudden hit during Asia hours on Tuesday, with the global market cap dropping by another 1% to $1.65 trillion.
Within a few hours, Bitcoin slipped 2% from $43,400 to $42,500, marking almost a 3% plunge over 24 hours. Top altcoins like ETH, SOL, BNB, XRP, and others also saw a 2-4% decline within this short span.
Why the Sudden Crypto Market Downturn? Hopes were high for a Santa Claus rally, but soaring funding rates are rattling traders, stirring panic in the market. There’s a need for the market to chill out a bit to sustain its upward movement. Coinglass, a derivatives exchange data platform, highlighted, “Funding Rates going crazy. Expect huge volatility.”
This frenzy led traders to exit their long positions, triggering a broader selloff across the crypto market. A staggering $40 million in longs got liquidated within an hour. In the past 24 hours, 70,611 traders faced liquidation, totaling $170 million. Longs accounted for over $90 million, while shorts contributed $79 million to the liquidations.
BTC, ETH, SOL, ORDI, XRP, SATS, AXS, and 1000SATS were the most liquidated assets in the last 24 hours, with ETH taking the lead in the most recent hour.
In other news, reports emerged that Mt. Gox creditors have begun receiving their Bitcoin payments. This development might prompt some to cash in their Bitcoin profits, with miners keeping a close eye on the situation.
BTC, ETH, and Other Crypto Prices Take a Hit Upcoming Friday’s annual options delivery is set to be a significant event, impacting nearly half of Bitcoin and Ethereum options positions. With elevated funding rates, traders might be considering shifting their positions, factoring in elements like an expected approval for a spot Bitcoin ETF, Bitcoin halving, and technical chart patterns.
BTC’s price dipped from a 24-hour high of $43,765 to its current trading value of $42,759. Trading volume has surged by 26% in the past day, indicating heightened trader interest. This comes as BTC’s OI-weighted funding rate skyrockets.
ETH is trading at $2231, down over 2% in the last 24 hours. There’s been a slight uptick in trading volume during this period as well.
