The cryptocurency market saw a continued broad sell-off led by Ethereum (ETH) and other major layer 1 competitors falling between 4% and 7% over the past day.
This furthers the recent trend of weaker altcoins relative to BTC which is now up over 12% in the past week while most altcoins are down. Interestingly, this comes as liquidations have increased sharply across all exchanges with over $700 million worth of long positions being liquidated in the past 24 hours alone.
As is the case whenever there are sharp liquidations in the crypto market, a large number of leveraged derivatives traders always bet on the wrong horse and record high losses.
Over USD 35m of bitcoin long positions have been liquidated since midnight UTC Monday. Taking a broader look at the crypto market, the liquidations have crossed USD 134m during the same period.
BitMEX and Binance Futures were the hardest hit as BTC liquidations on these exchanges crossed $170 million for the past week.
While the data does not show any reason for the ongoing sell-off, it is safe to say that the market is in a state of panic with investors running for the exits.
According to a Glassnode report, BTC is in the process of forming a new support level at the USD 39,000 to 40,000 level, after being rejected at the USD 47,000 resistance price level in late March.
The report further states that, “The rejection at this key resistance level led to a sell-off that found support around $39,000. From here, Bitcoin has been consolidating in a narrow range for the past week. The key question now is whether Bitcoin will be able to find support at this current level and stage a recovery.”
This consolidation is taking place within the context of a larger bearish trend that has been the case with most crypto assets.
The bearish market conditions are taking their toll on the crypto industry with an increase in liquidations. The data from ByBt suggests that the current market conditions are putting pressure on bitcoin holders. Some have been forced to sell their holdings due to the bearish market conditions, which has led to an increase in liquidations. While the exact reason for the
According to crypto exchange Kraken’s latest report from Friday last week, “aggressive buy interest” was noticed for ETH and UST in the last week. The report also described an interest in buying bitcoin when prices went below the USD 40,000 mark. This report adds strength to the notion of a level of support around this price level.
It is said that some market participants believe that the sell-off in the cryptocurrency market was caused by the news that China would crack down on cryptocurrency mining. However, it is worth noting that this is not the first time that China has taken such a stance on cryptocurrencies.