Market Tumbles Amid Overheated Expectations
Over the past 24 hours, total liquidations of crypto traders have surpassed one billion dollars, with BTC’s price temporarily dipping below $100,000 after a recent surge toward an all-time high of $106,000. What triggered this sharp correction?
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The cryptocurrency market's plunge was driven by excessive optimism about expected crypto regulations Trump had promised to enact right after his inauguration. Additionally, the rapid rise and subsequent fall of the memecoin TRUMP significantly influenced the market dynamics.
According to CoinGlass, around $1.18 billion was liquidated in a single day, impacting more than 406,000 traders. The bulk of these were long positions, amounting to $921 million, while short positions saw losses of only $260 million.
Liquidations as of January 20, 2025. Source: coinglass
The TRUMP memecoin, which sparked a frenzy over the weekend, plummeted over 45% in value within just a few hours on January 20, even though its fully diluted market cap had surpassed $70 billion the previous day.
The decline of the memecoin coincided with the launch of Melania Trump's token (MELANIA), the wife of the newly elected U.S. President. Her token surged to a peak market cap of over $13 billion shortly after trading began, exacerbating market volatility. The potential entry of Donald Trump Jr. with his own token, DON, adds an unpredictable element to this family-driven meme craze.
Prominent crypto trader Bluntz commented on platform X that the signs of an impending crash had been evident for some time. He suggested that now might be an opportune moment to take profits.
As the market continues to slump, altcoins are also losing value. Ethereum dropped more than 4%, hitting an intraday low of $3,390, yet it has so far avoided a deeper correction.
As the inauguration day churns the crypto market, stay alert, remember to set stop-losses, and buckle up to navigate through the turbulence.
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