Liquidations Soar in Crypto Market while Some Traders Hope for ‘Upcoming Bounce’

cryptonews.com:

The crypto market saw a broad sell-off led by ethereum (ETH) and other major layer 1 competitors falling between 4% and 7% over the past day. The fall led to a spike in liquidations, with some popular traders now speculating that the market could be getting ready for a reversal higher.

Over the past 24 hours, bitcoin (BTC) fell by 3.6% to a price of USD 39,027, while ETH was down by 4.3% to USD 2,916. For the past 7 days, BTC and ETH were down by 7.7% and 9.4%, respectively (as of 10:24 UTC).

As can often be seen during sharp sell-offs in the crypto market, a large number of leveraged derivatives traders were caught on the wrong side of the bet.

At press time, more than USD 35m of leveraged bitcoin long positions had been liquidated since midnight UTC time on Monday. For the crypto market as a whole, the liquidations reached close to USD 134m during the same time period – a level not seen since the major market sell-off on Monday last week.

According to the on-chain analytics provider Glassnode, BTC is in the process of forming a new support level at the USD 39,000 to 40,000 level, after being rejected at the USD 47,000 resistance level in late March.

However, the firm warned in a newsletter today that the correlation between bitcoin and traditional risk assets such as stocks remains high, hinting that support levels will not necessarily hold should stock prices fall.

The downside risks for the bitcoin price were also reflected in the crypto Fear & Greed Index, which on Monday morning indicated ‘extreme fear’ among market participants.

The current reading marks a worsening in sentiment from Sunday and a further worsening from last week when only ‘fear’ was indicated.

Crypto Fear & Greed Index:

According to crypto exchange Kraken’