A crypto market crash is happening today, Nov. 12, with most tokens being in the red. Bitcoin price crashed below $103,000, while most tokens were down by over 5%.
Starknet (STRK) tokens dropped by 16% in the last 24 hours, while Zcash, Internet Computer, Pump, and Filecoin plunged by over 13%.
Other top laggards in the crypto industry were coins like Immutable, Ethena, Arbitrum, Official Trump, and Uniswap, which plunged by over 10% in the last 24 hours.
Crypto market crash caused by profit-taking and panic selling
One of the top reasons why the crypto market crash is crashing today is that investors are simply taking profit after a strong rally recently.
A closer look at the top laggards mentioned above shows that they were the top gainers recently. Starknet was the best gainer on Monday even as investors waited for its large token unlock.
Zcash price has made headlines as it jumped from $30 to over $700 in less than a month, leading to more demand for privacy tokens like Dash and Monero. It is now plunging as investors start to book profits and as it enters the distribution phase of the Wyckoff Theory.
Uniswap price was also the top gainer this week after the developers announced a large-scale token burn initiative. WLFI token also jumped after a major Donald Trump victory in the US, where he secured a vote to reopen the government without making major concessions to the Democrats.
Crypto crash happening as liquidations rise
The crypto market crash is happening because of the rising liquidations, which caught many bulls off guard.
Bitcoin positions worth over $115 million were liquidated in the last 24 hours. Ethereum, Zcash, and Solana positions worth over $26 million were liquidated in this period. Over 150,000 traders were wiped out.
A liquidation is a situation where an exchange closes long positions once a certain level, known as a margin call, is reached. It normally leads to more selling pressure in the market.
Crypto traders have good memory and many of them remember what happened on October 11 when over 1.6 million traders were wiped out in a single day, losing over $20 billion. Since then, many of these trades have remained in the sidelines as they fear being wiped out again.
A good example of this is the futures open interest and the funding rate. Open interest in the futures market has plunged to $142 billion, down from over $250 billion a month ago. Bitcoin’s interest has moved from $94 billion in October to $68 billion today. The same is happening among other tokens in the crypto industry.
Most importantly, the funding rate for most cryptocurrencies has remained flat in the past few days as activity in the futures market waned
ETF demand has deteriorated
The other main reason why the crypto market crash is happening is that ETF demand has crashed in the past few weeks. Data shows that Bitcoin ETFs have had just $1.5 million in inflows this week after they shed $1.2 billion last week. They had shed $798 million in assets a week before.
Ethereum ETFs have had no inflows this week after they shed $504 million last week. These ETFs have shed about $2 billion in assets in the last few weeks. This is a sign of low demand in the market.
The same is happening among Digital Asset Treasury companies, which have largely stopped buying as their stock prices plunged. While Strategy is still buying, other companies like GameStop and MetaPlanet have largely paused as their NAV multiples fall.
Another reason for the crypto crash is the correlation with the stock market, which plunged on Tuesday, with companies like NVIDIA and CoreWeave leading the way.
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