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The cryptocurrency market faced a harsh decline, with the largest cryptocurrency Bitcoin (BTC) and various altcoins dropping by more than 5%. Bitcoin led the downturn with a 5.6% loss in value, while numerous altcoins saw declines of 10% and more.
$500 Million Wiped Out
According to data from Coinglass, the latest downturn in the cryptocurrency market triggered liquidations exceeding $500 million. Long positions accounted for $414 million of these liquidations, while short positions made up $85 million. Notably, Bitcoin saw $66 million in liquidations, with the remainder occurring in altcoins.
Recent observations by leading crypto firm QCP Capital indicate significant interest and high activity in the options market for both Bitcoin and Ethereum (ETH). The interest in put options is higher, which is exerting downward pressure on spot prices. Particularly, ETH is showing high levels of implied volatility.
In the short term, sell orders for ETH have surpassed buy orders, leading to a negative 5% risk skew for April. This suggests a dominant sentiment in the options market for downside protection for ETH and reflects a cautious approach among traders regarding potential short-term price movements.
Experts warn that the speculative enthusiasm in the cryptocurrency market is facing a significant hurdle due to the persistent absence of looser monetary policy expectations in the US and the Federal Reserve’s determination to continue its tight monetary policy.
Sharp Decline in Memecoins
The recent downturn in the cryptocurrency market has also impacted the memecoin sector, which had been the focus of interest lately. Over the weekend, Dogecoin (DOGE) rose to $0.22 but then fell by up to 15%. Similarly, other leading memecoins like Shiba Inu (SHIB) and Dogwifhat (WIF) experienced sharp declines.
Furthermore, in the last 24 hours, memecoins such as Pepe (PEPE) and Bonk (BONK) also fell victim to the downturn, melting away by more than 10%.
