At the start of the week, with the opening of Asian markets, there was a major sell-off in cryptocurrencies. Following the sell-off wave, the global cryptocurrency market value decreased by 5%, falling to $1.57 trillion. Bitcoin’s price experienced a 7% drop, while major sell-offs occurred in the most talked-about altcoins of the past month, including Ethereum (ETH), XRP, Solana (SOL), Cardano (ADA), DOGE, and SHIB. The “Crypto Fear and Greed Index” dropped from 82 to 80 but still remained in the extreme greed zone.
Many analysts had predicted a decline in cryptocurrencies in recent days. Consequently, there was an expectation of a correction in the crypto market among traders.
Popular Bitcoin analyst WillyWoo pointed to BTC’s price movement, indicating that it is not common for its price to double in a two-month period without a pullback and that a correction is normal. Corrections and pullbacks are important to validate subsequent rallies that may occur during ‘extreme greed’ periods.
Referring to the CME in recent days, we had mentioned a potential correction this week. The Bitcoin CME Gap reflected in charts that it needed to be filled at a level of $39,700 before a possible rally. In this context, the BTC price could drop a bit more before triggering a rise. Following this market situation, open interest (OI) on CME and Binance was liquidated by approximately 5% and 8%, respectively.
As witnessed on December 12th, in just one hour, long positions worth $354 million were liquidated, and according to CoinGlass data, there were large liquidations of over $400 million. The biggest single liquidation of the day, valued at $8.23 million, took place in OKX’s BTC-USDT-SWAP. Over 119,000 traders were liquidated during the day in the last 24 hours.