XRP, Dogecoin Dive 12% as Altcoin Carnage Leads to Highest Bullish Liquidation in Nearly 3 Years

Market analysts and traders warn of short-term selling pressure amid an overheated market following a November rally

By BCBNews.org | Edited by BCBNews.org Team

What to Know:

• XRP, Dogecoin (DOGE), and Cardano’s ADA fell as much as 15% in the past 24 hours as selling pressure intensified in late U.S. hours.

• No immediate reason spurred the selling, but market concerns rose after Google’s announcement of benchmark tests for its new Willow quantum computing chip.

• Market analysts and traders warned of short-term selling pressure amid an overheated market following a November rally.

Major tokens and midcaps faced one of their most significant drops in recent months during early Asian hours on Tuesday, even as Bitcoin (BTC) remained relatively stable.

XRP, Dogecoin (DOGE), and Cardano’s ADA tumbled by up to 15% in the past 24 hours, with selling pressure mounting in late U.S. hours and escalating in early Asian trading. Bitcoin saw a minor 3% dip, while Ethereum (ETH) and Solana’s SOL fell by 7%. Tron’s TRX erased nearly all of last week’s gains, suffering a sharp 17% decline.

Overall market capitalization dropped 6.5%, marking the most significant decline since October. Meanwhile, the CoinDesk 20 (CD20) index fell 7%.

No immediate catalyst sparked the sell-off. However, Google’s announcement of benchmark tests on its new Willow quantum computing chip led to heightened market anxiety about potential threats to crypto wallet security and privacy.

Altcoin Carnage and Record Liquidations

Market analysts and traders warned that the selling pressure was linked to an overheated market following a November rally, echoing insights reported earlier by BCBNews.org.

The steep market decline resulted in over $1.5 billion in liquidated bullish bets — the highest figure since 2021. Altcoin futures categorized under “Others” by data provider CoinGlass accounted for $560 million of the total liquidations, with Dogecoin and XRP futures recording more than $70 million each in losses.

Unusual Market Behavior Raises Questions

Some market watchers noted that selling pressure initially emerged from U.S.-based Coinbase, with notable impacts on XRP. Data suggested that traders were excessively leveraged, potentially setting the stage for the sharp pullback.

“Something absolutely strange happened,” remarked the widely followed quant trader @ltrd_ on X.
“On a large, relatively mature market, we witnessed a cascade of big sell orders that caused the market to drop by over 5%. We don't know exactly what happened, but it's certainly unusual.”

The trader speculated that a major player might have been forced to sell large holdings under distress, leading to abnormal sell orders and market dislocations.

“You can see that those sell orders are not normal… Perhaps a major player was forced to sell as if there were no tomorrow,” they added, pointing to unusual market activity worth monitoring in the coming days.

Impact of Large-Scale Liquidations

A liquidation occurs when an exchange forcibly closes a trader's leveraged position after they fail to meet the margin requirements. Large-scale liquidations often reflect extreme market conditions like panic selling or buying. A chain reaction of liquidations can signal a potential market reversal, as the overreaction in sentiment may trigger price corrections.