A significant decline was observed in the cryptocurrency market, with the prominent cryptocurrency Bitcoin (BTC) and various alternative coins (altcoins) dropping by more than 5%. Bitcoin led the decline by losing 5.6% of its value, while many altcoins witnessed decreases of 10% or more.
$500 Million Liquidated
Data from Coinglass revealed that over $500 million worth of liquidations were triggered by the recent downturn in the cryptocurrency market. The liquidations primarily consisted of $414 million from long positions and $85 million from short positions. Notably, Bitcoin accounted for $66 million in liquidations, with the rest affecting altcoins.
Recent insights from prominent crypto firm QCP Capital indicated a high level of interest and activity in the options market for both Bitcoin and Ethereum (ETH). The demand for put options was notably strong, putting downward pressure on spot prices, particularly in ETH, which displayed substantial implied volatility.
In the short term, sell orders for ETH outpaced buy orders, resulting in a negative 5% risk skew for April. This indicates a prevailing sentiment in the options market towards downside protection for ETH, reflecting a cautious outlook from traders on short-term price movements.
Experts cautioned that the speculative fervor in the cryptocurrency market is encountering a significant obstacle due to the persistent absence of expectations for looser monetary policy in the US and the Federal Reserve's commitment to maintaining a tight monetary policy.
Decline in Memecoins
The recent downturn in the cryptocurrency market also influenced the memecoin sector, which had garnered substantial attention recently. Over the weekend, Dogecoin (DOGE) surged to $0.22 but later plummeted by up to 15%. Similarly, other popular memecoins like Shiba Inu (SHIB) and Dogwifhat (WIF) experienced notable drops in value.
Additionally, memecoins such as Pepe (PEPE) and Bonk (BONK) suffered declines exceeding 10% in the last 24 hours.
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