Crypto Market Crash: Bitcoin implied volatility crashed, will Ethereum (ETH), Solana (SOL), XRP, Dogecoin (DOGE) and other altcoins fall?
Crypto Market Crash: The crypto market witnessed a sharp selloff on Monday as $90 million in positions were liquidated within an hour. Bitcoin price slipped more than 1%, whereas Ethereum price dropped nearly 2% due to profit-booking by investors.
Top altcoins such as Solana (SOL), BNB, XRP, Cardano (ADA) also tumbled 2-3% after a massive price rally in the last 24 hours. Meme coins Dogecoin (DOGE) and Shiba Inu (SHIB) plunged 6% in an hour. The crypto market shows volatile moves ahead of US CPI and jobs data.
While the crypto market seems extremely bullish after pro-Bitcoin Donald Trump’s win in the US presidential elections, some data signals a potential crash.
Will Crypto Market and Bitcoin Crash Soon?
Coinglass data indicates the crypto market recorded $90 million in liquidation in 4 hours and $650 million in the last 24 hours. Notably, $75 million in long positions and $15 million in short positions were liquidated in a few hours, triggering a selloff in the market.
Over 217K traders were liquidated, with the largest single liquidation order happened on crypto exchange OKX, with a BTC-USDT swap trade valued at $15.56 million.
Bernstein analysts gave a Bitcoin price target of $90,000 by year-end. BTC price made a new all-time high of $81,858 today, indicating a bullish rally in the top crypto. However, the derivatives market data signals concerns of a massive selloff that could trigger a crypto market crash.
BTC implied volatility (IV) in all terms is falling sharply, especially BTC ATM-7 IV. Bitcoin At-the-money (ATM) implied volatility is a market’s forecast of a likely movement in price for BTC. Thus, options traders don’t see Bitcoin price rallying further currently.
As a result, major crypto such as Ethereum, Solana, XRP, and Dogecoin prices dropped and triggered a broader crypto market selloff.
Moreover, Mt. Gox moved over 30,371 BTCs worth $2.44 billion to two wallets on Monday, as per Arkham data. This has raised some concerns among investors as these typically imply that an exchange plans to sell tokens soon.
Weakness in Bitcoin, ETH, XRP, DOGE Due to Macro Factors
China’s latest stimulus measures of 10 trillion yuan debt package has disappointed investors, leading to a shift in sentiment. The markets are bracing for initial volatility as the Donald Trump administration is anticipated to make major policy changes.
The looming US CPI and PPI inflation, along with jobless claims and Fed Chair Jerome Powell speech this week are impacting the crypto market. Economists forecast the inflation data to come in higher and could impact market amid political shifts in the United States. Some BTC, ETH, XRP and DOGE investors have pullback due to macro factors.
However, popular analysts are bullish on Bitcoin price for a long term, ignoring the crypto market crash concerns. Veteran trader Peter Brandt predicted a complex continuation inverted head-and-shoulder pattern formation sets BTC price target to almost $125K by year-end and $300K in the longer term.
It is important to note that despite skepticism for this pattern, notable analysts such as Richard W. Schabacker, Robert Edwards, and John Magee have accepted this pattern.
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