XRP (XRP) and Dogecoin (DOGE) Lead Market Decline as $1.6 Billion Gets Liquidated

TLDR

• Crypto market saw $1.56 billion in liquidations within 24 hours
• Ethereum led liquidations with $229 million, followed by Bitcoin at $173 million
• XRP and Dogecoin both dropped approximately 10%, with liquidations of $68M and $88M respectively
• Long positions made up 90% of liquidations ($1.39 billion)
• XRP price dropped to $2.09, showing a 15% decline over seven days

The cryptocurrency market experienced a substantial correction as $1.56 billion in positions were liquidated within the past 24 hours. The event marked one of the largest liquidation cascades in recent months, with popular cryptocurrencies such as XRP and Dogecoin experiencing double-digit percentage losses.

Data from cryptocurrency analytics platform CoinGlass reveals that long positions bore the brunt of the market movement, accounting for $1.39 billion of the total liquidations. This represents nearly 90% of all positions closed during the period, indicating a strong bearish turn in market sentiment.

Ethereum emerged as the primary contributor to the liquidation event, with $229 million in positions being forcefully closed. This marks a departure from typical market behavior, where Bitcoin usually leads such events. Bitcoin saw $173 million in liquidations, placing it second in terms of impact.

Dogecoin traders experienced $88 million in liquidations as the popular meme cryptocurrency faced substantial selling pressure. XRP followed closely behind with $68 million in liquidations, as its price declined to $2.09, marking a 15% decrease over the past seven days.

Dogecoin Price on CoinGecko

The widespread nature of the market correction became evident as smaller capitalization cryptocurrencies, collectively categorized as ‘others’ in market data, accumulated to $496 million in liquidations. This figure underscores the depth of speculative interest across the entire cryptocurrency sector.

The market movement caught many traders off guard, particularly those who had positioned themselves for continued upward momentum following Bitcoin’s recent push to new highs. While Bitcoin managed to limit its losses to approximately 2%, other cryptocurrencies in the market faced more severe drawdowns.

Liquidations in cryptocurrency markets occur when trading positions, particularly those using leverage, face forced closure due to mounting losses. The exact threshold for these automatic closures varies between trading platforms, but the mechanism serves as a risk management tool for exchanges.

The scale of today’s liquidation event highlights the prevalence of leveraged trading in the cryptocurrency markets. Traders often employ leverage to amplify potential returns, but this practice also increases the risk of liquidation during periods of high volatility.

Market data indicates that speculative interest in the sector has reached notable levels recently, contributing to the severity of the liquidation event. The combination of high leverage and market volatility created conditions conducive to the massive position flush.

XRP Price on CoinGecko

The impact on XRP has been particularly notable, with the cryptocurrency trading around $2.09 at the time of reporting. This represents a decline of almost 15% over the past week, marking a substantial deviation from its recent upward trajectory.

Small-cap cryptocurrencies demonstrated their susceptibility to market volatility, collectively contributing to nearly one-third of the total liquidation value. This suggests that risk-taking behavior extended beyond major cryptocurrencies to more speculative assets.

The derivatives market, where these liquidations occurred, has shown increased activity in recent periods. The size of today’s event, while exceptional, reflects the growing importance of derivative trading in the cryptocurrency ecosystem.

Cryptocurrency exchanges reported heightened trading volumes during the liquidation event, as traders adjusted their positions in response to the market movement. The increased activity contributed to temporary spikes in network congestion on several blockchain networks.

The market correction affected various cryptocurrency pairs differently, with some trading pairs experiencing more severe liquidations than others. This disparity in impact highlights the varying levels of leverage and speculation across different cryptocurrency markets.

The most recent data shows the liquidation event beginning to stabilize, with the rate of forced position closures decreasing. XRP continues to trade around the $2.09 level, while other major cryptocurrencies show signs of finding price support.