The crypto market witnessed a significant reversal of earlier gains, turning “red” during US trading hours as a massive selloff painted the broader market landscape. The global crypto market cap decreased by more than 2.60% to $1.18 trillion, with over $182 million worth of crypto assets liquidated in the past 24 hours.
Bitcoin price plunged by 5% to below $28,500, while Ethereum also experienced a sharp drop below the $2,000 level. The news of Ethereum Foundation and Ethereum creator Vitalik Buterin selling over 15,000 ETH is cited as the potential trigger behind the recent crypto market selloff. The CoinGape Media reported that similar ETH disposal events in November 2021 led to a substantial 40% decline in the ETH price within two months.
Altcoins such as PEPE, FLOKI, LUNC, Arbitrum, Litecoin, and Aptos also suffered major losses. Notably, PEPE and FLOKI recorded massive profit booking following their over 50% surge in the last 24 hours. Additionally, Binance introduced some limitations in market order functions for Shiba Inu (SHIB), FLOKI, and PEPE trading pairs.
According to Coinglass data, more than $182 million worth of long positions were liquidated on May 6, affecting nearly 65,000 traders. The largest single liquidation order was for a Bitmex ETHUSD pair worth $7.70 million. However, the Bitcoin Coinbase Premium has risen, signifying a price difference between Coinbase Pro (USD) and Binance (USDT). The Bitcoin aSOPR metric also climbed over 1, indicating that more investors are selling at a profit.
The current market pattern suggests a high likelihood of a further downward correction for Bitcoin, which may see its price fall below the 50-day moving average. Additionally, the 20-day moving average is crossing below the 50-day moving average. For a positive price momentum, Bitcoin needs to reclaim the $29.2k level and maintain support above $28.4k.
In conclusion, it is crucial for investors to conduct thorough market research prior to making investment decisions in cryptocurrencies. While market events such as the Ethereum Foundation and Vitalik Buterin’s ETH liquidation have short-term implications, it is essential to consider long-term prospects and the technology underlying these digital assets. As always, the responsibility for personal financial loss lies with the investor, so diligence and risk management are crucial.