Bitcoin and Cryptocurrency Prices Experience a Sharp Drop: What’s Happening in the Market?

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• The crypto market witnessed a sudden widespread sell-off on Tuesday, reducing the global crypto market value to $1.65 trillion.
• Investors were expecting a Santa Claus rally, but high funding rates are causing panic among traders.
• BTC, ETH, SOL, ORDI, XRP, SATS, AXS, and 1000SATS are among the most liquidated assets in the last 24 hours, with ETH standing out in the last hour.

Cryptocurrency prices experienced a sharp selling wave on Tuesday and saw a huge decline: What is happening in the market?

Cryptocurrency Prices Take a Sharp Dive

The crypto market experienced a sudden widespread sell-off on Tuesday, reducing the global crypto market value to $1.65 trillion. The price of Bitcoin dropped from $43,400 to $42,500 in a matter of hours, experiencing nearly a 3% decline in the 24-hour period. Major altcoins such as ETH, SOL, BNB, XRP, and others also witnessed a 2% to 4% decline in just a few hours.

Investors were expecting a Santa Claus rally, but high funding rates are causing panic among traders. The market needs to cool down for its upward movement to continue. Coinglass, a derivative exchange data platform, stated, “Funding Rates are going crazy. We expect big fluctuations.”

This led traders to move away from long positions, triggering a widespread sell-off in the crypto market. The crypto market saw the liquidation of $40 million in long positions in just one hour. In the last 24 hours, 70,611 traders were liquidated, with total liquidations amounting to $170 million. This included liquidation of long positions over $90 million and short positions over $79 million.

BTC, ETH, SOL, ORDI, XRP, SATS, AXS, and 1000SATS are among the most liquidated assets in the last 24 hours, with ETH standing out in the last hour. Meanwhile, according to reports, Mt. Gox creditors have started receiving Bitcoin payments. This will lead some to sell their Bitcoin gains, and miners are closely monitoring the activity.

BTC, ETH, and Other Crypto Prices Are Falling

According to COINOTAG, the upcoming annual options expiration event on Friday will be a significant event with almost half of the Bitcoin and Ethereum option positions facing expiration. With high funding rates, traders may consider adjusting their positions based on various factors, including the potential approval of the spot Bitcoin ETF, Bitcoin’s halving, and expected technical chart patterns.

The BTC price fell from the 24-hour peak of $43,765 and is currently trading at $42,430. Additionally, trading volume increased by 26% in the last 24 hours, indicating interest from traders. The BTC-weighted open interest ratio showed an increase. The ETH price is currently trading at $2,225, with a decline of more than 2% in the last 24 hours. Trading volume increased slightly in the last 24 hours.