Major tokens and midcaps registered one of their worst days in recent months with a sharp drop during early Asian hours on Tuesday, even as bitcoin (BTC) was relatively little changed.
XRP, dogecoin (DOGE) and Cardano’s ADA fell as much as 15% in the past 24 hours, data shows, as selling pressure mounted in late U.S. hours and amplified in early Asian time. Bitcoin dropped 3%, while ether (ETH) and Solana’s SOL fell 7%, as tron’s TRX nearly reversed all of last week’s gains with a 17% haircut.
Overall market capitalization dropped by 6.5%, largest drop since October, while the broad-based CoinDesk 20 (CD20) index slumped 7%.
No immediate reason spurred the selling pressure, but it came on the back of internet giant Google announcing benchmark tests on its new Willow quantum computing chip — which led to market concerns about what it meant for crypto privacy and wallet security.
Market analysts and traders warned of short-term selling pressure amid an overheated market after a November rally, as CoinDesk reported earlier Monday.
The fall led to over $1.5 billion in longs, or bullish bets, being liquidated, the highest such figure since 2021. Altcoin futures tracked under “Others” by data provider CoinGlass led market losses at $560 million in an unusual move, with doge and XRP futures losing more than $70 million each.
Some market watchers pointed out that the selling pressure first rose from U.S.-listed Coinbase, with an unusual market impact on XRP and metrics indicating that traders were over-leveraged.
“Something absolutely strange happened,” widely followed quant trader @ltrd_ said on X. “On a large, relatively mature market, we witnessed a cascade of big sell orders that caused the market to drop by over 5%. We don’t know exactly what happened, but it’s certainly unusual.”
“You can see that those sell orders are not normal…Perhaps a major player was forced to sell as if there were no tomorrow,” they added.
You can see that those sell orders are not normal. Something happened in the market. It might be worth monitoring this situation over the next few days. Perhaps a major player was forced to sell as if there were no tomorrow. pic.twitter.com/aitfBiNaPq
— ltrd (@ltrd_) December 10, 2024
A liquidation occurs when an exchange forcefully closes a trader’s leveraged position due to the trader’s inability to meet the margin requirements. Large-scale liquidations can indicate market extremes, like panic selling or buying. A cascade of liquidations might suggest a market turning point, where a price reversal could be imminent due to an overreaction in market sentiment.
