Crypto Market Suffers Significant Losses Amidst Wave of Liquidations
The crypto market experienced a substantial downturn on Tuesday, with over $400 million in long liquidations wiping out bullish momentum and dragging major tokens back into the red. This significant loss comes after the market had gained momentum on Monday, only to give it all back during U.S. trading hours on Tuesday. 
The crypto fear and greed index has fallen back into “Extreme Fear” levels, indicating a bearish market sentiment. Leading cryptocurrencies like Bitcoin, Ethereum, and Solana posted losses between 2-6%, with Bitcoin slipping to an intraday low of $102,461 on Wednesday, Nov. 12, down nearly 5% from its Tuesday high above $107K. Ethereum was down 3.2%, trading at $3,450, while other large-cap altcoins such as XRP, BNB, Solana, and Dogecoin were down between 3-6%.
Market Sentiment and Liquidations
The combined outflows from the total crypto market dragged it down by 2.1% to $3.56 trillion, with nearly $525 million in liquidations amid macroeconomic pressures. Out of this, around $402 million came from long liquidations, signaling that bullish traders were caught off guard by the sudden drop. When long positions get liquidated, it often triggers a chain reaction of forced selling that can put pressure on the related asset’s prices and deepen market losses.
Market sentiment has turned largely bearish as traders remain fearful of large long liquidations, especially after last month’s massive $19 billion wipeout, which dragged the crypto market down by more than 14% in a single day. The closely watched Crypto Fear & Greed Index lost 2 points in the past 24 hours and has moved back to the “Extreme Fear” zone.
Global Economic Factors and Crypto Market
The crypto market dipped as traders booked profits en masse following Monday’s rally, with many stepping back to digest reports that China’s cybersecurity agency has accused the U.S. government of stealing around $13 billion worth of Bitcoin from the LuBian mining pool, one of the most notorious crypto heists in recent memory. Investors remain wary about whether China will take any retaliatory action against the U.S. government, which could further strain relations at a time when the two economies are already grappling with unresolved tariff issues and delays in finalizing a trade agreement.
Additionally, Japanese investment bank SoftBank revealed it sold its entire $5.8 billion stake in Nvidia, driving the stock of the world’s most valuable company down by nearly 3% today. The tech-heavy Nasdaq 100 index dropped by 200 points, while the S&P 500 lost 20 points in the session.
AI-Focused Cryptocurrencies and Market Trends
Meanwhile, the market capitalization of artificial intelligence-focused cryptocurrencies, one of the core themes in the broader crypto industry, has declined by 5.5% over the past 24 hours to $26.6 billion. Tokens like Story (IP), Bittensor (TAO), and Render (RENDER) led the losses, among other popular AI-related assets. For the uninitiated, tech stocks and crypto markets often move in tandem, as both are widely regarded as higher-risk assets that tend to react similarly to shifts in investor sentiment.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only. For more information on the crypto market and its trends, visit https://crypto.news/crypto-market-liquidations-cross-520m-as-btc-eth-xrp-sol-drop-again/
