The cryptocurrency market witnessed a significant downturn, with Bitcoin (BTC) leading the plunge. According to recent data from CoinGecko, Bitcoin’s price dropped to $35,362.52, marking a decline of 4.1% within 24 hours. 

The market capitalization of Bitcoin now stands at approximately $691 billion, with a 24-hour trading volume of over $24 billion. 

This sudden dip in value has led to a substantial wipeout of open interest in Bitcoin futures, amounting to around $600 million, as reported by Daan Crypto Trades on Twitter.

Liquidation frenzy

The impact of this price drop has been particularly severe on traders holding long positions. According to CoinGlass data, in the past 24 hours, the total liquidations amounted to $366.27 million, affecting 103,213 traders. 

The largest single liquidation order occurred on the OKX exchange with a value of $9.45 million in a BTC-USDT-SWAP. 

Long positions bore the brunt of these liquidations, accounting for the majority of the losses across various exchanges. 

For instance, on OKX, 98.55% of the $142.02 million in liquidations were long positions, reflecting the market’s predominantly bullish sentiment prior to the drop.

Cooling off? 

Due to the market becoming overheated, some analysts believe this correction might have been overdue. 

Despite the recent plummet, Bitcoin’s performance over the past year shows a gain of 109.40%, with a remarkable year-to-date increase of 113.25%. This suggests that the market was potentially overheated, warranting a correction. 

In contrast to the cryptocurrency market, major stock market indices have shown positive movement. Following the release of inflation data showing a decrease to 3.2%, U.S. stocks and bonds experienced a surge, with the S&P 500 and Nasdaq Composite rising by 1.9% and 2.2%, respectively.

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