The crypto space witnessed yet another steep free-fall, which extracted 26% of the total market cap which revisited $1.9 trillion levels before recovery. Also, the DeFi and the NFT’s space shed huge gains in the recent sell-off. BTC alone faced long liquidations of nearly $1.9 billion in the past couple of hours, liquidating more than 300K traders. The bulls quickly jumped in to accumulate Bitcoin and other altcoins at huge discounted prices. However, despite the rebound, yet the uptrend needs 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.
As per the on-chain platform, the exchange increased its reserves just before the plunge to have a sufficient balance to buy the dip. The estimated leverage ratio also hit ATH which signifies that the traders were ready with high-leverage short trades much before the dip. And interestingly, the whale ratio hitting 3-year high points out towards a pre-planned strategy. It appears that the whales and the exchanges were well-informed about the dip much before the plunge.
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 the bottom is on the path of a decent recovery. All the altcoins including Bitcoin are attempting hard to get back to their initial positions. December was expected to be pretty bullish for the space but the sudden crash has hindered the rally. However, the resumption of the bull run may be completely dependent on the recovery rate and pace. Once BTC’s price regains positions above $55K, then the possibilities of the higher target may come back to life.