Major Tokens Plunge 14% Causing $840M in Liquidations

In the past 24 hours, major tokens experienced significant losses, with some falling nearly 14%. This downturn led to over $840 million in long liquidations, primarily driven by a plunge in bitcoin (BTC) prices. According to CoinGlass data, bitcoin traders who bet on higher prices incurred losses of over $322 million, while those betting on ether (ETH) lost nearly $290 million. Smaller alternative tokens (altcoins) recorded nearly $400 million in liquidations, with futures tracking XRP and Solana’s SOL seeing an unusually high $80 million in cumulative liquidations.

Bitcoin slid to under $77,000 in its worst start to a historically bullish month late Tuesday, with ether (ETH) down 15% to $1,500. SOL, XRP, and dogecoin (DOGE) experienced declines of as much as 15%, before slightly recovering in the Asian morning hours. BNB Chain’s BNB held relatively stronger with a 6% slide. The nosedive in major tokens was reflected across midcaps and smaller tokens, all showing drops of over 10-20% as per CoinGecko.

Data indicates that nearly 86% of all futures bets were bullish. Traders were positioning for higher prices in the weeks ahead, expecting that current market conditions were likely priced in and that markets could see near-term relief. A liquidation occurs when an exchange forcefully closes a trader's leveraged position due to the trader's inability to meet the margin requirements. Large-scale liquidations can indicate market extremes, such as panic selling or buying. A cascade of liquidations might suggest a market turning point, where a price reversal could be imminent due to an overreaction in market sentiment.

Global equities and risk assets, including bitcoin, took a hit as investors remained fearful of the fallout from economic uncertainties, sending U.S. stock index futures lower by about 5% as trading resumed after the weekend. Hedge fund billionaire Bill Ackman urged the president not to go through with economic "nuclear war" and instead call a "time out."