Crypto Market Crashes 10%: Did You Miss the Warning Signs?

After a promising surge yesterday, the crypto market took a sudden 10% dive, falling to $3.57 trillion. This unexpected drop has left traders questioning whether on-chain data had hinted at the crash. According to CryptoQuant analyst Maartunn, the signs were there, but many overlooked them.

The result was a wave of liquidations, rattling long-position investors.

Binance’s Buying Activity: A Hidden Signal

Maartunn identified several warning indicators that suggested the market was on shaky ground. One key factor was Binance’s Net Taker Volume, which showed strong buying activity. While this seemed positive, it hinted at an unstable price rise, raising concerns about a potential slowdown.

Leverage Creates Market Risk

Another major red flag was the sharp increase in leverage. Open interest surged by 15%, showing heavy reliance on borrowed funds. While leverage helped fuel price gains, it also made the market highly vulnerable to a pullback, especially as greed began to dominate sentiment.

The Crypto Fear & Greed Index offered another cautionary sign, showing the market deeply entrenched in “greed.” Retail demand also jumped 30% over the past month, hitting its highest level in four years. Together, these metrics indicated a market primed for correction.

Liquidations Spark a 10% Flash Crash

As Maartunn explained, the result of these factors was inevitable a massive wave of liquidations occurred. Over $150 million worth of long positions were liquidated, marking the highest long liquidation event in at least 1.5 years. 

This triggered a flash crash of 10%, catching many investors off guard and leading to heightened market volatility.

The market has spoken, and it’s a harsh wake-up call for those chasing unsustainable gains.