$120 million worth of liquidations have occurred in the past day on the cryptocurrency market, with long holdings accounting for 70% of all cancelled orders. The PEPE meme asset, as well as its clones and derivatives, are linked to a sizeable fraction of these liquidations. The majority of meme coins now available have displayed signals of a brief downturn, and their value can fall at any time.
Fortunately, a chain reaction of liquidations has not yet taken place. Nevertheless, investors should exercise caution, especially in light of the recent cash-outs by the Ethereum Foundation and Vitalik Buterin, co-founder of the cryptocurrency, as well as the increasing number of exchange withdrawals.
These digital assets have seen enormous increases as a result of the current capital-attracting frenzy surrounding meme currencies like PEPE and its derivatives. However, there is always a chance of a quick fall, just as with any investment that is very speculative. This risk has grown more obvious as meme currencies go through brief corrections that result in a significant amount of market liquidations.
The liquidation of long holdings suggests that a lot of investors had been counting on the meme coin’s continuous ascent but had been taken off guard by the abrupt turnabout. The $120 million in liquidations act as a sharp reminder of the risks associated with investing in highly volatile assets, especially when the markets are unclear.
Additionally, the recent withdrawals by the Ethereum Foundation and Vitalik Buterin have increased worries about the viability of the cryptocurrency market as a whole. These actions may have exacerbated the impact of the meme coin fall by prompting some investors to review their positions and remove money from exchanges.
Although a full-blown cascade of liquidations has not yet occurred, the current state of the market requires investors to exercise prudence. Because of the rise in exchange withdrawals and high-profile cash-outs, it is crucial for market players to be alert and ready for any unexpected changes in attitude.
