Nikolas Sargeant
Cryptocurrencies faced significant losses across the board on Monday and Tuesday, with Bitcoin, Ether, and a wide range of altcoins seeing sharp declines. Bitcoin, which had briefly surpassed $100,000 earlier in the day, retreated to around $95,000 by late U.S. trading hours, marking a 5% drop in the past 24 hours. Ether fell 10%, and several midcap altcoins saw double-digit losses, including Cardano (ADA), Avalanche (AVAX), and XRP, which each dropped by roughly 20%. Other notable losers included Dogecoin (DOGE), which fell by 12%, and Solana (SOL), down by 7%.
The broad market selloff was triggered by a series of factors, including profit-taking after a November rally, concerns around Google's announcement of its Willow quantum computing chip, and a possible overheated market. Analysts also pointed to waning momentum in the crypto sector, with declining exchange volumes and heavy liquidations of leveraged positions. Over $1.5 billion in long positions were liquidated, the highest since 2021, contributing to a sharp drop in market capitalization by 6.5%, the largest decline since October.
Despite Bitcoin's relative outperformance, the broader CoinDesk 20 Index plunged by more than 8%. Altcoins such as XRP, Dogecoin, and Cardano were hit hardest, with market analysts cautioning that short-term selling pressure may persist as the market adjusts after its recent bullish momentum. The mass liquidations, which totaled $750 million in derivatives over the past day, sparked fears of an imminent market correction.
As the market digests these losses, many traders are repositioning for a period of sideways action, with options markets signaling a cautious outlook for the remainder of the holiday season. Some market watchers believe this may be a brief consolidation phase before the bull market resumes, while others warn that the volatility is far from over.
