Crypto just kicked off the week on a sour note.
Cryptocurrencies saw big declines on the back of a broad-based sell-off on Monday as positions worth $1.5 billion were liquidated, according to data from Coinglass, causing the price of tokens like bitcoin and ethereum to tumble.
Over 407,000 traders liquidated positions on the crypto derivatives market the 24 hours leading up to Monday, Coinglass data shows. That marks the biggest liquidation wave the crypto market has seen since March 27, according to the crypto trading platform.
Bitcoin dropped as much as 3% on Monday to trade around $111,000, before the coin pared its losses and climbed back above the $113k mark.
Ethereum dropped as much as 9% to trade around $4,000 before edging back up to around $4,200. It was down about 6% midmorning on Monday.
Other popular tokens, like Worldcoin, FLOKI, and dogecoin, dropped more than 9% on Monday, putting them among the crypto market’s biggest losers, according to data from CoinMarketCap. XRP was down 4% and solana lost 7%.
Long positions in the crypto market had been looking “overcrowded” leading up to the liquidation wave, Linh Tran, a market analyst at XS.com, wrote in a note on Monday.
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“This is a healthy process that reduces the risk of sharp long squeeze and provides a stronger foundation for a sustainable trend,” Tran said, adding that bitcoin looked like it was entering a “correction phase.”
“This pause is seen as necessary to absorb profit-taking pressure, reduce short-term leverage, and lay the groundwork for a more stable price base,” Tran continued.
“Sentiment has been dented by the scale of the declines, and much now depends on whether these markets can bounce back quickly, or head lower to test more significant support levels,” David Morrison, a senior market analyst at Trade Nation, wrote in a note about Monday’s sell-off.