Why did the cryptocurrency market decline?
The cryptocurrency market witnessed a sudden drop of nearly 3%, despite Bitcoin (BTC) reaching a new all-time high of $112,000 before falling to around $108,460 (-2.6% in 24 hours). This decline is attributed to profit-taking by investors after the price peaked, leading to a wave of collective selling.
Forced liquidations:
The drop resulted in the liquidation of trading positions worth over $500 million, affecting 163,000 traders, most of whom lost ($400 million) due to their bets on the market's rise.
Severe decline for alternative coins:
Other cryptocurrencies were heavily affected, with Ethereum (ETH) dropping 4.3% to $2,541, while XRP, Solana, Cardano, and Tron fell by up to 4%. Even meme coins like Dogecoin (-3.9%) and Shiba Inu (-3.5%) and a Trump-related coin (-13%) experienced significant losses, following Bitcoin's trend.
In summary: The decline is attributed to factors such as profit-taking after the record rise, sharp fluctuations that caused massive forced liquidations, with smaller coins suffering more than Bitcoin.