As sentiment falls to 10-month lows, cryptocurrency liquidations reach $1 billion
Following the price drop, the crypto market saw significant liquidation. Coming off the weekend, the market has had one of its greatest drops, with bitcoin falling below $30,000 for the first time this year. This has resulted in hundreds of millions of dollars in short liquidations. However, the carnage appears to be far from finished, as the market continues to deteriorate and liquidations have already surpassed the $1 billion threshold.
Crypto traders were heavily hurt by the market drop that occurred during the weekend. However, as is typically the case, this is skewed to one group, and long traders bore the brunt of the blow, accounting for 77.5 per cent of the $421 million liquidation number posted on Monday.
With Tuesday on the horizon, traders in the area face even greater problems. While most people predicted that bitcoin would never go below $30,000, it has, and even momentarily dipped below $29,000 before rebounding. However, the damage would be done when additional traders saw their positions in the market liquidated.
This figure has already surpassed $1 billion in the last 24 hours, with Bitcoin and Ethereum dealers feeling the brunt of it. Long holdings continue to dominate liquidations as bitcoin tries to regain its footing and rebound. The percentages in favour of long traders have improved marginally, falling from 77.5 per cent on Monday to 71.8 per cent on Tuesday.
At the time of writing, the total amount of liquidations is $1.10 billion. Longs accounted for $789.27 million, while shorts accounted for $310.04 million. Bitcoin and Ethereum continue to compete with liquidations totalling $354.77 million and $326.51 million, respectively.
Along with the crypto market drop, market sentiment has fallen. This comes as no surprise given that sentiment has been continuously unfavourable over the last few weeks. The market crisis, on the other hand, has hastened this movement. The Crypto Fear & Greed Index presently stands at 10. This is one of the lowest readings in the index’s history. With such a low figure, the market is in an acute fear area. This implies that investors are more hesitant than ever to put money into the market, with some deciding to sell their holdings to avoid further losses.
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