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The cryptocurrency market plunged as the meme coin sector dropped 12%, XRP and Dogecoin nosedived and crypto liquidations hit a three-year high.
The market capitalization of all cryptos tumbled 4% to around $3.47 trillion as of 1:57 a.m. EST as XRP and Dogecoin led losses among the top 10 cryptos with drops of 9.9% and 8.2%, respectively, as of 3:10 a.m. EST.
POPCAT, IOTA And WIF Suffer Most As Crypto Liquidations Spike In Cryptocurrency Market Carnage
Solana meme coins were among the biggest losers in the last 24 hours. Feline-themed token Popcat (POPCAT) suffered the biggest loss after its price plunged over 21%.
Dogwifhat (WIF) also made the top 3 losers list following a 17% drop in value. Meanwhile, Internet of Things project IOTA posted the second biggest loss of more than 18%.
The recent drop in crypto prices also led to over $1.5 billion in longs being liquidated, which is the highest liquidation of bullish trades since 2021. CoinGlass data shows that altcoin futures led the market losses at $560 million, while futures for leading meme coin Dogecoin (DOGE) and Ripple (XRP) both led to total losses exceeding $70 million.
Opportunities To Buy The Dip Might Last Longer This Cycle
Still, the steep drop in crypto prices over the last 24 hours opens an opportunity to buy the dip by opportunistic investors and traders with strong appetites for risk.
Steep drops are often followed by strong rebounds and a crypto fund manager has predicted that investors will this time around have more time to capitalize on these opportunities to buy crypto at lower prices.
“There will be intra-month volatility, but the pullbacks likely will be a “buy the dip” scenario for much longer than everyone expects,” said Syncracy Capital co-founder Daniel Cheung in a Dec. 9 post on X.
Market participant psychology has drastically shifted in crypto this cycle.
In prior cycles, participants largely engaged in a HODL and buy the dip mentality.
This cycle, participants are mostly in a short term / trading mentality and constantly looking to take profits, despite…
— Daniel Cheung (@HighCoinviction) December 9, 2024
Cheung based his belief on his observation that traders have shifted to a “short-term” trading mentality as they now constantly look “to take profits.”
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