The crypto market is in a pretty bearish trend today, and many of the leading cryptocurrencies have recorded big losses. This drop has led to over $1trillion in market value being erased, which makes it one of the worst days for the sector in the last few months. Altcoins, especially, have been affected severely with many tokens experiencing double-digit losses.
However, the volatility is still present even in Bitcoin, which is still the leading cryptocurrency. The market decline is due to liquidation, bearish psychology, and change in investor’s perception. All of this left market participants wondering why is the crypto market down.
Crypto Market Downturn: XRP Plunges Amid Broad Market Sell-off
Ripple’s native token, XRP, has also taken a significant hit and its price has fallen today. The coin has dropped by more than 10%, reaching the intraday minimum at the level of $2.07. Recently, XRP has been a subject of high levels of speculation, which is a key factor behind the price fluctuations. The market has influenced XRP’s short-term performance, and now more long positions are getting liquidated.
The current market correction has reduced the market capitalization of XRP to $119 billion. Liquidations are also impacting XRP holders, as many futures positions are being closed at a loss.
Nevertheless, there are still some analysts who remain bullish on XRP even with the current state of fluctuations in the market. It is for this reason that market analysts are now stating that the recent whale activity and bullish technical patterns may push the price higher. As XRP remains above a crucial support level, experts predict prices to rise by as much as 150% with targets set at $4.30 to $6.40 in the next few months.
Dogecoin and Cardano Face Double-Digit Losses
Other popular altcoins like Dogecoin (DOGE) and Cardano (ADA) have also seen a massive decline today. Dogecoin, a cryptocurrency that was spurred by social media, saw its value decrease by 11%.
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Cardano, the largest smart contract platform, followed with a decline of 13%. These two cryptocurrencies have experienced market fluctuations in the recent past, especially due to fluctuations in speculative investments.
The steep declines in these altcoins indicate that investors are becoming more risk-averse. This is because the retail trader will probably be selling aggressively in response to the bearish trend, which will only add more pressure to the existing losses.
Ethereum and Solana Also Struggle
Other major players in the smart contract and decentralized application market, Ethereum (ETH) and Solana (SOL) are also showing negative returns. Ethereum fell by 6%, trading at $3,700 at the time of writing. Ethereum’s market capitalization is now at $445 billion. This decline is in alignment with the larger market trend where many altcoins have given back some of their recent gains.
Solana, a blockchain that is famous for its high throughput and fast transaction processing, has seen a relatively smaller drop of about 5%. Its price is at about $210, and its market capitalization is at $100 billion. However, Solana has demonstrated an ability to bounce back during previous market downturns, which may be the case here.
Why is the Crypto Market Down: Liquidations At Play
The decline of the market can be attributed to the high number of liquidations that have been recorded in the last one day. According to CoinGlass, $1.76 billion of cryptocurrency positions were liquidated and longs led the loss. Some of these liquidations took place on the Binance exchange where more than $756 million was erased.
Ethereum and Solana have been the most impacted in the liquidations with Ethereum’s long liquidations standing at $223 million. These forced liquidations lead to more liquidations and thus have contributed to the further decline of the market. The investors in these positions are now seeking safer assets or stablecoins, which is also influencing the market sentiment.
