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The altcoin market experienced a significant downturn this week, with a nearly 10% drop in market cap triggering over $840 million in liquidations from leveraged long positions.
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Asian trading hours played a pivotal role in recent crypto rallies, while traders in the US and Europe led the charge in profit-taking, causing sharp corrections.
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According to COINOTAG sources, analysts consider this pullback a healthy market correction rather than a reversal, with overall sentiment still firmly in “greed” territory despite the declines.
Altcoin market cap plunges nearly 10%, triggering $840M in liquidations amid profit-taking by US and European traders; analysts see this as a healthy correction.
Altcoin Market Cap Plummets Nearly 10%, Leading to Massive Liquidations
This week, the crypto market cap printed its first red weekly candle after four consecutive green ones, signaling a pause in bullish momentum. The altcoin segment, represented by TOTAL2, fell sharply by almost 10%, from $1.57 trillion to $1.4 trillion, outpacing Bitcoin’s more modest decline. This steep correction resulted in significant losses for leveraged traders, with Coinglass reporting nearly $1 billion in liquidations within 24 hours.
Liquidation Data of July 24. Source: Coinglass
Out of the total liquidations, over $840 million came from long positions, highlighting the vulnerability of traders who anticipated continued price increases. This wave of liquidations underscores the risks inherent in leveraged trading during volatile market phases.
Altcoin Price Performance on July 24. Source: CryptoBubbles
The broad-based decline saw altcoins dropping between 6% and over 20%, marking a notable shift after four weeks of sustained gains. Market observers interpret this as a natural profit-taking phase rather than a sign of a deeper market reversal.
Asian Market Drives Rally While Western Traders Lock in Gains
Insights from 10x Research reveal that Asian trading hours were the primary catalyst behind the recent crypto rally. Bitcoin’s overall 16% monthly gain was largely driven by a 25% increase during Asian sessions, while European and US markets exhibited net selling of -6% and -3%, respectively.
Ethereum’s performance mirrored this trend, surging 63% over the past month with 96% of gains occurring during Asian hours. Conversely, Europe and the US saw declines of 26% and 7%, indicating profit-taking activity.
Ethereum Performance during Asia Trading Hours. Source: 10x Research
The report suggests that heightened enthusiasm and aggressive buying from Asian traders fueled the rally, while Western investors capitalized on gains by selling. This dynamic created a feedback loop where Asian traders reacted to positive news originating from Western markets, only to face a pullback as those markets took profits.
Market Sentiment and Analyst Perspectives on the Correction
Despite the sharp declines and significant liquidations, market sentiment remains in “greed” territory, indicating sustained investor confidence. Industry experts emphasize that this correction is a healthy recalibration rather than a bearish trend reversal.
KALEO, investor and founder of LedgArt, commented, “Not concerned with the dip in alts today. It was a sensible sell-off considering how much everything has gained recently. The most important thing is BTC held strong. Alts will bounce soon enough—likely even harder than their last leg up. Patience pays. Be more bullish.”
Similarly, Binance founder CZ described the correction as “a dip again,” reinforcing the view that the broader bullish trend remains intact.
Conclusion
The recent altcoin market correction, marked by a nearly 10% drop and close to $1 billion in liquidations, reflects a natural phase of profit-taking after sustained gains. Asian trading hours drove much of the preceding rally, while US and European traders led the current sell-off. Analysts and market leaders maintain a cautiously optimistic outlook, viewing the pullback as a healthy market adjustment rather than a reversal. Investors are advised to remain patient and attentive to market dynamics as the crypto landscape continues to evolve.
