Crypto Market Witnesses Massive Liquidations
The cryptocurrency market experienced liquidations of over $345 million in trading positions within the last 24 hours. Surprisingly, a substantial portion, approximately $100 million, came from cryptocurrencies outside the top 50 by market capitalization.
On June 8, Finbold obtained this data from CoinGlass following a significant crash that some speculators attribute to macroeconomic factors.
Traders of “Other” Cryptocurrencies Bear the Brunt
- Long-position traders in “other” cryptocurrencies faced significant losses, with liquidations amounting to $103.82 million.
- Short-sellers of these low-cap coins only lost $6.09 million, totaling a $109.91 million loss in 24 hours.
Bulls Suffer Major Setback
- Bulls bore the brunt of the liquidations, with $309.53 million out of the total $345.12 million liquidated across all digital assets.
- Bitcoin (BTC) saw liquidations of $43.21 million, while Ethereum (ETH) accounted for $38.75 million, primarily from long positions.
Altcoin and Meme Coin Traders Experience Losses Amid Liquidations
TradingView’s crypto market cap index (TOTAL3) includes all cryptocurrencies except BTC and ETH, and it has lost over $60 billion in capitalization since June 7. The index currently stands at $666 billion, testing its resilience before a potential altseason.
- The TOTAL3 index is slightly below its 30-day exponential moving average (30-EMA) on the daily chart.
- A bounce from this support level could signal a bullish momentum for altcoins, potentially triggering a surge.
- Analysts have identified a unique opportunity in alternative cryptocurrencies, suggesting significant gains may be on the horizon.
The recent market crash may help identify solid projects amidst the surge in meme coin popularity. However, investing in meme coins comes with substantial risks due to their speculative nature.
- Meme coins often lack inherent value and rely heavily on social media hype and speculation to drive prices.
- Investing in meme coins is akin to gambling, with traders banking on selling at a higher price to others.
- The “Greater Fool Theory” underlines the risks associated with investing in overvalued assets, as markets may eventually run out of buyers.
- As demand diminishes and hype fades, traders risk holding worthless assets and incurring significant financial losses, as seen in the recent liquidations.
Hot Take: Proceed with Caution in the Crypto Market
As the cryptocurrency market experiences significant liquidations and volatility, it is crucial for traders to approach investments cautiously and be aware of the risks associated with trading cryptocurrencies. Understanding market dynamics, conducting thorough research, and diversifying portfolios can help mitigate potential losses and navigate market fluctuations effectively.
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