The cryptocurrency market has experienced a significant downturn, with Bitcoin (BTC) falling by 5.6% to $66,654. The broader altcoin market has also declined, with the top ten altcoins shedding 6-10% of their value. The correction triggered liquidations of over $500 million, including $414 million in liquidated longs. Notable activity in the options market includes increased selling of calls and buying of puts for BTC and Ethereum (ETH), indicating cautious sentiment and elevated implied volatility. The meme coin sector has faced significant sell-offs, with Dogecoin (DOGE) dropping 13% to $0.1881.
Cryptocurrency Market Plunges, Liquidations Surge amid Bearish Sentiment
The cryptocurrency market has witnessed a significant correction in recent hours, with the broader market capitalization shedding a notable 6%. As of press time, Bitcoin (BTC), the bellwether of the industry, has tumbled 5.6%, currently trading at $66,654 with a market capitalization of $1.311 trillion. The sell-off has also engulfed the altcoin space, with the top ten altcoins experiencing corrections ranging from 6-10%.
Amidst this market turmoil, a staggering $500 million in liquidations have ravaged the crypto market, according to data from Coinglass. Long positions have borne the brunt of this liquidation spree, accounting for $414 million, while short positions have contributed an additional $85 million. Bitcoin alone has witnessed $66 million in liquidations, with altcoins accounting for the remainder.
Notably, the options market has been abuzz with activity, with traders expressing a heightened interest in selling calls and purchasing puts for both Bitcoin and Ethereum (ETH), according to observations shared by QCP Capital. This behavior has exerted downward pressure on spot prices, while implied volatility remains elevated, particularly in ETH.
In the case of Ethereum, demand for puts has far outpaced that of calls in the near-term, resulting in a downside risk reversal skew of -5% for April. This skew underscores a prevailing sentiment toward downside protection in the options market for ETH, reflecting cautious sentiment among traders regarding potential price movements in the near future.
The once-booming meme coin sector has also succumbed to the market correction, with a sell-off across the board. Dogecoin (DOGE), which surged to 22 cents over the weekend, has plummeted 13% at press time, currently trading at $0.1881. Other meme coins such as Shiba Inu (SHIB), Dogwifhat (WIF), and others have also entered a steep correction.
The combination of diminishing speculative fervor and the prospect of looser monetary policy in the United States has cast a pall over the cryptocurrency realm, leading to a decline in values for previously favored coins among meme-trading communities, such as Pepe, Dogwifhat, and Bonk.
Market analysts attribute the recent correction to a combination of factors, including geopolitical tensions, interest rate hikes, and the ongoing regulatory scrutiny surrounding cryptocurrencies. Short-term price fluctuations are an inherent feature of the cryptocurrency market, and investors are advised to exercise caution and conduct thorough research before making any investment decisions.
