The collapse of major digital currencies except one resulted in losses totaling $800 million
The cryptocurrency market witnessed the anticipated sharp correction following an exceptional bull run that took Bitcoin prices to an unprecedented peak of $73,777 per token, pushing the market capitalization to $2.7 trillion USD with insane surges in alternative and meme coins.
The market capitalization of digital currencies dropped by 7%, as major cryptocurrencies like Bitcoin and Ethereum experienced significant declines over the past 24 hours.
This decline coincided with the release of inflation data coming in higher than expected and a profit-taking wave by some traders. Some analysts anticipate further losses before a potential rebound.
The market capitalization of digital currencies dropped by 7%, marking the largest decline this year, with Bitcoin (BTC) plummeting by 8% over the past 24 hours, erasing weekly gains and starting a downward trend alongside the entire market.
Bitcoin dropped from its Thursday high of $73,777 to $65,800 at its lowest before rebounding today, trading at $66,885.3 at the time of writing. Meanwhile, the CoinDesk 20 Index, a broad indicator of the most liquid digital currencies, dropped by 8.25%.
Ether (ETH), Cardano (ADA), Binance Coin, and Ripple (XRP) showed similar losses, while volatile meme coins Dogecoin (DOGE) and Shiba Inu (SHIB) dropped by 13%. Solana (SOL) managed to maintain its high level, currently trading above $190 with a weekly increase of 27.06%.
Selling and downward movements began during U.S. trading hours on Thursday with the Producer Price Index for February rising by 0.6%, doubling January’s pace and exceeding economists’ expectations, dampening hopes for a rate cut in May.
Data indicates that cryptocurrency futures contracts suffered over $800 million in losses, the second-largest figure this year. Long positions or bets on price increases faced liquidations worth $660 million, likely contributing to the sharp decline. Liquidation occurs when the exchange forcefully closes a trader’s leveraged position due to partial or total loss of initial margin.
Some traders warned of further losses in the coming weeks before an eventual price recovery.
In an email to CoinDesk, Alex Kuptsikevich, FxPro’s senior market analyst, said, “New historic highs are the motivation behind the selling.” “Some players are taking profits, raising questions about whether there are enough serious buyers at current levels or whether the majority would prefer to wait for a deeper correction.”
Kuptsikevich added according to CoinDesk regarding the expected downside targets for Bitcoin: “In a correction scenario, the zones of $65.0-65.5 thousand and $60.0-60.5 thousand are particularly significant, as they contain important round levels (important for retail) and Fibonacci correction levels of 76.4% and 61.8%.
