In just 24 hours, XRP and SOL plunged over 14%, sparking panic in the crypto market. Over $800 million in long positions got liquidated on futures exchanges, leaving investors bewildered. What triggered this steep drop, and what's on the horizon for these currencies in the crypto space?
Crypto investors have experienced heavy losses in the past 24 hours, with drops of over 14% for major cryptos like XRP and SOL. In total, over $800 million of long positions have been liquidated on the futures markets.
The price plunge was led by Bitcoin, which dropped below $77,000. Ethereum also fell by nearly 15%, dipping below the $1,500 mark. This sharp correction dragged many other cryptocurrencies down, with drops of 10 to 20% across the market.
Data shows that nearly 86% of positions in the futures markets were bullish, reflecting traders’ expectations for higher prices in the weeks ahead. However, this wave of massive liquidations could signal a market turnaround.
Significant liquidations indicate a sense of panic and market sentiment overreaction. When the momentum becomes this extreme, a trend reversal is often imminent, as prices tend to overreact in both directions.
After this dark session, crypto investors will need to exercise extreme caution. Violent market movements and cascading liquidations are often precursors of a trend reversal. Therefore, it will be crucial to remain vigilant about the market’s upcoming developments in the days and weeks ahead.
Furthermore, monitoring BTC at market opening, as the SP500 could extend its decline after this afternoon’s opening.
Retail investor involvement has surged on the SP500, indicating that the drop could continue for a few days.
On the other hand, Bitcoin broke below its support at $76,630, its previous low. It could still continue to fall this week, as a significant demand zone lies between $71 and $73,000. If selling pressure persists, BTC could drop as low as $69,000.
XRP broke its key support at $2 and continues its steep decline, currently trading at $1.69. If BTC fails to bounce back, XRP could drop further towards its demand zone around $1.35. If that level doesn’t hold, the decline may extend to at least $1.
On the other hand, Solana dipped below the psychological level of $100. It has just rebounded at a significant zone at $95. But if the downtrend persists, SOL must hold above $83, or it will target $50.
In case of a bullish reversal, SOL must reclaim $120 and maintain it. XRP, on the other hand, needs to regain $2.16.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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