The cryptocurrency market saw a significant sell-off on Tuesday, dragging down major tokens and leading to over $400 million in liquidated bullish bets. This decline coincided with a stronger dollar and strategic profit-taking by long-term investors.
Solana, Dogecoin Take a Harder Hit:
Among major tokens, Solana (SOL) and Dogecoin (DOGE) experienced steeper declines. SOL dropped by 7%, trading at around $185 after briefly touching $200 on Monday. Dogecoin fared worse, plunging over 8%. Bitcoin Cash (BCH) also saw a significant drop of 10%, likely due to profit-taking after a 40% rally fueled by the upcoming network halving event scheduled for April 4th.
Liquidations and Market Sentiment:
The market downturn resulted in over $400 million in liquidations of bullish bets, also known as longs. These positions anticipate price increases, and their liquidation indicates forced selling due to insufficient funds to maintain leveraged positions. Interestingly, short positions, which bet on price decreases, saw comparatively smaller liquidations of around $85 million.
Analysts at crypto exchange Bitfinex believe Bitcoin is likely to trade within a specific range in the coming weeks. They attribute this prediction to a combination of factors, including:
- Profit-Taking by Long-Term Holders: They observed strategic selling by investors holding Bitcoin for more than 155 days (Long-Term Holders or LTHs), though at a smaller scale compared to previous bull market peaks.
- Resistance at $71,000: Analysts at FxPro, a financial services company, suggest Bitcoin faces resistance at the $71,000 level. This aligns with Bitcoin’s failed attempts to consolidate above this price point during the week.
Overall, the recent sell-off highlights the inherent volatility of the cryptocurrency market. While the near-term outlook seems cautious, analysts remain divided regarding Bitcoin’s future trajectory.
This information is not legal advice. Do your own research before making any decisions. Only invest what you can afford to lose and seek independent financial advice if needed. Understand the risks involved before purchasing any cryptoasset