On Monday, the cryptocurrency market experienced a significant Bitcoin price drop and sharp losses in Ether, as more than $1.5 billion in bullish positions were liquidated. Ether fell up to 9% to $4,075, while nearly half a billion dollars of leveraged long positions were closed. Bitcoin dropped temporarily by 3% to $111,998. Other altcoins, including Solana, Algorand, and Avalanche, also recorded losses.

Cause of the Bitcoin and Ether Price Drop

The main driver behind the crypto price drop was large-scale liquidations of leveraged positions. According to Coinglass, more than 407,000 positions were liquidated within 24 hours on Monday. Analysts warn that unless Bitcoin rises above $115,000, there is a risk of further declines.

Impact on Altcoins

Altcoins were hit hard, with Ethereum down 9%, XRP falling 3.8%, and other coins such as Binance Coin, Solana, Dogecoin, Cardano, and Chainlink losing between 2.9% and nearly 7%. By 4:00 PM Dutch time, Bitcoin and Ether recovered slightly, but most cryptocurrencies remained in the red. The total crypto market capitalisation temporarily fell below $4 trillion.

What This Means for the Crypto Market

The recent crypto liquidations highlight the volatility of the market, even with institutional support and ETF structures. Investors are reminded to be cautious, especially with leveraged positions. For new and smaller investors, it underlines the importance of understanding risks in the fast-moving crypto market.

Disclaimer: This is not financial advice. Always do your own research and/or consult a professional before making investment decisions.