The crypto market experienced a sell-off on Wednesday, as major altcoins declined and reversed recent gains.
Bitcoin dipped 0.6% to $117,868, holding relatively steady despite the sharp decline in altcoins.
The market correction appears to be happening “without a clear catalyst,” Min Jung, research analyst at Presto Research, told The.
“This seems more like a breather or profit-taking event, especially considering that Ethereum is still up 7% and Dogecoin 12% over the past week, even after today’s pullback,” said Jung.
Nassar Al Achkar, CoinW’s chief strategy officer, shared similar views.
Nassar Al Achkar, chief strategy officer of CoinW, shared similar views. “The sharp pullback of crypto prices reflects temporary profit-taking after recent rallies, which have been compounded by leveraged liquidations and rotation out of altcoins ahead of key ETF decisions,” he said.
Crypto Liquidations Surge
Meanwhile, Vincent Liu, CIO of Kronos Research, suggested that “cascading liquidations and thinning liquidity” pulled crypto down, as over-leveraged longs flushed across fragile altcoins.
CoinGlass data shows that the crypto market saw $837 million in total liquidations over the past 24 hours. Ethereum accounted for $168 million of this, including $142.4 million in long positions. XRP long positions experienced an additional $92.7 million in liquidations.
Bitcoin, on the other hand, saw $73.5 million in total liquidations, including $57.4 million from long positions.
Crypto liquidations happen when significant losses or insufficient margin force the closure of a trader’s positions in the crypto market. The reported liquidation figures are based on publicly available data and may significantly understate the true scale of market liquidations. API limitations and incomplete reporting often mean that data aggregators capture only a portion of actual activity.
While altcoins face pressure from “fading retail interest,” traders are closely monitoring geopolitical tensions, institutional exchange-traded fund inflows, and technical support levels, said Nick Ruck, director of LVRG Research.
Jung of Presto also stated that the broader macro theme remains intact.
Jung of Presto also said that the broader macro theme remains intact. “Crypto continues to see strong demand from corporate treasury buyers. Traders are closely watching upcoming earnings from major tech firms and any signals from macro data,” he said.
