Great Crash in the Cryptocurrency Market: 20% Decrease in Altcoins

The slow decline that started in the cryptocurrency market towards the end of the weekend accelerated on Monday evening in the US and led to sharp losses throughout the sector.

Bitcoin (BTC) was trading just above the $95,000 level at press time and has lost 5% of its value in the last 24 hours. Ethereum (ETH) fell 10% to $ 3,590.

The CoinDesk 20 Index, which tracks the broader cryptocurrency market, lost over 8% in the same time period. Altcoins leading these losses include Cardano (ADA), Avalanche (AVAX) and XRP (XRP); each was down about 20%.

According to CoinGlass data, a total of $750 million in leveraged derivative positions in digital assets were liquidated in the last 24 hours. The majority of these positions consisted of transactions opened with upward expectations. These liquidations approached the crash on August 5, narrowly surpassing last Thursday’s wild swing that saw BTC drop from $100,000 to $90,000.

Signs of Decrease in Market Momentum

Analytical company 10x Research, making evaluations about the decline in crypto markets, showed the decrease in transaction volumes in the stock exchanges and the acceleration of profit realization by long-term investors as signs of the market losing momentum.

“This is most likely a temporary consolidation phase before the bull market regains momentum,” said 10x Research founder Markus Thielen, advising investors to be careful.

“Investors should focus on which positions are outperforming the market and which are lagging. “This rally will not be a period where everything goes up.”

Horizontal Cruise Expectation

Digital asset hedge fund QCP stated that investors in the options markets predict that prices will remain flat by the end of the year. While profits were made from previously opened upward positions, it was noted that some investors carried their positions until the beginning of the new year.

“We believe we are still structurally in a bull market, but spot prices may remain flat for the remainder of the holiday season,” QCP said, recommending that investors be more cautious.