At the beginning of the week, the opening of Asian markets was marked by a significant sell-off in cryptocurrencies. Following the sell-off, the global cryptocurrency market value decreased by 5%, falling to $1.57 trillion. Bitcoin experienced a 7% drop in price, while major sell-offs also occurred in the most talked-about altcoins of the past month such as Ethereum (ETH), XRP, Solana (SOL), Cardano (ADA), DOGE, and SHIB. The “Crypto Fear and Greed Index” dropped from 82 to 80, but it still remains in the extreme greed zone.
Many analysts had predicted a decrease in cryptocurrency values in recent days. Consequently, traders had been expecting a correction in the crypto market.
Popular Bitcoin analyst WillyWoo pointed to BTC’s price action, noting that it is not common for the price to double within a two-month period without a pullback, and that a correction would be normal. Corrections and pullbacks are important to validate subsequent rallies that might occur during ‘extreme greed’ periods.
We had mentioned a potential correction this week, referring to the CME in recent days. The Bitcoin CME Gap indicated on the charts that it needed to be filled at the $39,700 level before a possible rally. In this context, the BTC price might fall a bit more before triggering a rise. Following this market situation, the open interest (OI) on CME and Binance was liquidated by approximately 5% and 8%, respectively.
Like the $354 million worth of long positions liquidated in just one hour on December 12th, data from CoinGlass indicated that liquidations exceeded $400 million. The largest single liquidation of the day was worth $8.23 million and occurred on OKX’s BTC-USDT-SWAP. Throughout the day, more than 119,000 traders were liquidated in the last 24 hours.