The crypto space experienced another steep free fall, which extracted 26% of the total market cap which revisited $ 1.9 trillion levels before the rally. Also, the DeFi and NFT space lost huge gains in the recent sale. BTC alone has faced long liquidations of nearly $ 1.9 billion in the past two hours, liquidating more than 300,000 traders. The bulls quickly stepped in to accumulate Bitcoin and other altcoins at heavily discounted prices. However, despite the rebound, the uptrend remains to be confirmed.
Crypto Market Crash Continues
A popular on-chain analytics platform shared some interesting insights that occurred just before the plunge began. CryptoQuant lists 3 main indicators that pointed toward a massive movement happening ahead.
According to the on-chain platform, the exchange increased its reserves just before the plunge to have enough balance to buy the plunge. The estimated leverage ratio also hit the ATH, meaning traders were ready for short, high-leverage trades long before the decline. And it’s interesting that the ratio of whales peaking at 3 years indicates a pre-planned strategy. It appears that the whales and trade were well informed of the dive long before the dive.
Nearly $1.3 billion in long positions were liquidated during this dump from $51K to $42K. The total open interest has gone down from $21.6 billion to $16.7 billion in just 30 minutes. And hence nearly $5 billion of the open interest just evaporated during the plunge. And interestingly, huge long positions were limited on Binance and Bybit indicating the preparations for the upcoming plunge.
Overall, the crypto space after hitting rock bottom is on the way to a decent recovery. All altcoins, including Bitcoin, strive to return to their original positions. December was expected to be rather bullish for space, but the sudden crash hampered the rally. However, resuming bull running may depend entirely on the rate and pace of recovery. Once the price of BTC regains positions above $ 55,000, the possibilities for the higher target may come to life.
