After the stock market closed on Wall Street, a huge sell-off in thecryptocurrencies market accelerated. The selling is causing panic in the market.
There are some alt coins that are trading more than 30% lower, but the drops in the giants are staggering. The time was as of 5:45 p.m. In the last hour and a half, it has fallen by 5.4% and is down by 10.8%. In the last 90 minutes, the price of ether was $2,512.
In the last 24 hours, Cardano has plummeted 13.4% and Solana is down 19.1%. There is rapid selling going into the weekend.
The image is from the same source.
So what?
There are some things to look at in short-term trading. Liquidations are increasing as investors with bets that the price of cryptocurrencies will rise liquidate their positions. In the last 24 hours, more than $1 billion in positions have been sold, and $416 million of them came in the last four hours. In the last four hours, the industry has seen $113 million in liquidations.
Gas fees are going up, especially on the ethereum block. The price of gas goes up when the network is congested.
Yesterday the price of gas was 203.7GWei and right now it's over 500GWei. It's not unusual for gas fees to be close to 100GWei, so there's clearly a high level of activity, likely led by panic selling in the market.
What now?
We don't know when the selling will stop, that's the challenge with the situation right now. The market can plunge quickly when leverage and panic selling collide.
Market makers who buy when others are selling can dry up on the weekend, which is a concern. I don't think it's a coincidence that the stock market closed for the weekend on Friday.
It's normal for cryptocurrencies to be volatile but right now that's working against investors instead of them like it has been for most of the last two years. This may continue until the market finds a floor. There's a lot of innovation in cryptocurrencies, but that doesn't mean this sell-off won't be painful for investors.
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