The cryptocurrency market has been subject to major liquidations following the fall in prices. Coming off the weekend, the market suffered one of its worst falls, with bitcoin dropping below $30,000 for the first time this year. This resulted in hundreds of millions of short liquidations. However, the crisis appears to be far from over as the market continues to crash and liquidations have now passed the $1 billion mark.
Crypto traders get carried away
After the crash that rocked the market coming out of the weekend, crypto traders have been hit hard. However, as always, the numbers are still skewed in favor of one demographic group, and it was long traders who were hit hardest, with 77.5% making up the majority of the $421m liquidation recorded. Monday.
Space traders had to face new challenges. While most speculators thought bitcoin wouldn’t fall to $30,000, it did, even briefly falling to $29,000 before recovering. But the damage was done, as more and more traders saw their positions liquidated in the market.
That figure has now topped $1 billion liquidated in the past 24 hours, with Bitcoin and Ethereum traders bearing the brunt. Once again, longs continue to dominate sell-offs as bitcoin struggles to find its footing and rally. The numbers are slightly better in favor of long traders, dropping from 77.5% on Monday to 71.8% on Tuesday.
The total amount of liquidations amounts to 1.10 billion dollars at the time of this writing. Long positions account for $789.27 million and short positions for $310.04 million. Bitcoin and Ethereum continue to compete with $354.77 million and $326.51 million in liquidations respectively.
Market sentiment plummets to hell
The fall in the cryptocurrency market has been accompanied by a decline in market sentiment. This is hardly a surprise, as sentiment has been consistently negative over the past two weeks. However, the market crash accelerated this move.
The Crypto Fear & Greed Index now has a reading of 11. This is one of the lowest the index has ever been over the past year. With such a low figure, this puts the market in extreme fear territory. This means investors are more fearful than ever of putting money into the market, with some opting to liquidate their holdings to avoid further losses.
It should be noted, however, that weak sentiment may also be the prelude to a bullish rally. The last time the index was this low was in July 2021. A rally ensued that eventually served as the starting point for bitcoin, which hit an all-time high of $69,000. . If history repeats itself, this could well be a fresh start for a massive bullish rally. If the bottom of the current crash has been reached.