The cryptocurrency market started the week with a major decline, slashing $1 trillion in market value. Some major digital assets, such as XRP, Dogecoin [DOGE], and Cardano [ADA], were realized to have losses, indicating higher volatility. The realization of market data highlighted the liquidation of the leveraged positions, which indicates the pressure of selling.
XRP declined by 12%, reaching an intraday low of $2.07; Cardano and Dogecoin erased 13.4% and 10.6%, respectively. Bitcoin, the most popular cryptocurrency, was down by 2.6% despite crossing $100000 on Monday; it fell to $94,100. It recovered to $97,800 before the close of the trading session.
Many liquidation events occurred, as $1.76 billion in positions were liquidated within a day. Consequently, long positions reached $1.58 bln, with around 600,000 trades impacted. Binance, for instance, revealed that a single Ethereum (ETH) trade translated to a $19.69 million loss. Binance suffered the highest liquidations, at $756.26 million.
Ethereum saw $223 million in liquidations during the sell-off, while Bitcoin experienced $148 million in liquidations. The total market capitalization declined by 7.5%, with Ethereum dropping below $3,800, an 8% decline. Solana, Dogecoin, and XRP ranked among the most frequently liquidated tokens, thus highlighting the market's current speculative trends.
Analytics firm Santiment witnessed a similar decline among retail investors, who claimed panic selling for the downturn. However, assets such as TRX, AVAX, DOT, and FIL may revive due to traders changing their market perceptions.
The sell-off happened when the BTC reached a record high of $103,679 in the trading market on December 4. Higher volatility came after losing $1.1 billion of leverage on December 5th, becoming the highest liquidation event since 2021. The market stability was under doubt with Bitcoin transfers initiated from Bhutan and releasing of Google's 'Willow,' a quantum computing chip. Nonetheless, experts say near-term quantum threats to blockchains' security are limited.
Most altcoins declined in the double digits, defining the market's weakness. These changes were extremely fast, and large-scale liquidations indicate the growing danger of highly leveraged holdings. Moreover, bitcoin has partially recovered, relieving some pressure from the bearish market, although people remain very cautious when trading due to unpredictability of the market.