Monday witnessed a seismic shift in the cryptocurrency landscape as a surge in profit-taking maneuvers led to substantial losses across major digital assets. Over $406 million in long positions evaporated within 24 hours, compounded by another $269 million in short-side losses. This $675.8 million liquidation marked one of the largest market disruptions since April, underscoring the volatile nature of the crypto market.
Major Tokens Feel the Heat
The most significant casualties of the market correction were bitcoin (BTC) and ether (ETH), with the former seeing over $333 million in forced closures while the latter lost $113 million. XRP didn’t escape unscathed either, shedding $36 million. This tumultuous trading session also impacted Solana’s SOL and dogecoin (DOGE), each losing around $14 million. This aligns with recent trends where crypto traders have been taking profits on XRP, DOGE, and SOL, despite dormant bitcoin whale movements.
In particular, Dogecoin bore the brunt of the day’s downturn, spiraling down by more than 7.6% as speculative enthusiasm dwindled. Bitcoin and ether also cooled off, dropping 3.1% and 2.6% respectively, after enjoying a nearly week-long rally.
“The market’s recent exuberance was bound to face a reality check,” noted crypto analyst Sarah Chung. “With elevated funding rates and derivative flows signaling caution, traders appear wary of chasing further upside.”
The Bigger Picture
This market correction occurs against the backdrop of bitcoin trading near record highs. However, some trading desks are exercising caution. Despite the impressive runs, there’s a palpable reticence to pursue further gains immediately. Elevated funding rates are making leveraged bets costly, and the memory of February’s massive $2 billion liquidation event lingers in traders’ minds.
“With BTC in uncharted territory, short-term ceilings remain unclear,” a note from QCP Capital to clients stated. It highlighted that, while options data indicates a cautious optimism, short-dated implied volatility is ticking up, yet remains below last year’s averages. September and December risk reversals still favor call options, suggesting a longer-term bullish outlook, albeit with a wary stance in the short term.
A Crossroads for Crypto
Interestingly, analysts urge caution against conflating momentum with inevitability. The rally is undeniably buoyed by burgeoning institutional demand and macroeconomic factors like a weakening dollar and potential Federal Reserve rate cuts. Yet, these dynamics also heighten the stakes. As covered in our recent analysis of market breakout opportunities, firms are signaling a ‘prime’ chance for significant gains, led by assets like Ether and Dogecoin.
“The road to $150,000 by Q3 looks increasingly plausible, powered by ETF inflows, supply constraints, and macro tailwinds,” said Ryan Lee of Bitget in a note to CoinDesk. However, he added a word of caution: “This isn’t a one-way street. Profit-taking, rate speculation, and geopolitical risks could spark a short-term pullback, potentially dragging BTC into a $105,000–$115,000 consolidation zone.”
As the crypto market navigates these choppy waters, traders and analysts alike are keeping a keen eye on upcoming macroeconomic signals and regulatory developments. With the crypto world poised on the brink of either a significant breakout or consolidation, the coming months promise to be anything but predictable. Will the market’s resilience persist, or are we on the cusp of another correction? Only time will tell.
Source
This article is based on: Dogecoin Leads Losses Among Majors as Profit-Taking Grips Crypto Market
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
