The cryptocurrency market experienced a severe shakeout over the past 24 hours, with nearly $887.46 million in leveraged positions wiped out amid a sharp downturn in altcoins and meme coins. According to data from Coinglass, Bitcoin traders suffered the largest losses, with $274.59 million liquidated, followed by Ethereum ($196.12 million), Solana ($98.93 million), and XRP ($40.50 million) positions.
Long positions bore the brunt, with $814.76 million wiped out, while short sellers faced only $72.69 million in losses. The largest single liquidation event was a $10 million order on BitMEX’s XBTUSD pair, highlighting the extreme volatility gripping the market.
Memecoin Collapse Fuels Panic Selling
The market rout was driven in part by the unraveling of speculative assets, particularly meme coins, which have faced intense selling pressure. Memecoins, known for their high-risk, high-reward nature, have come under scrutiny as concerns mount over sustainability and potential insider manipulations.
Solana, a major hub for memecoin activity, has been at the center of the storm, losing roughly $50 billion in market value over the past month. The turmoil has been exacerbated by the fallout from the Libra memecoin scandal, which involved allegations of insider manipulation tied to Argentinian President Javier Milei. Another high-profile meme coin, Official Trump (TRUMP), backed by U.S. President Donald Trump, has plummeted over 75% from its peak, further compounding negative sentiment around the sector.
Adding to the sell-off pressure, $1.72 billion worth of SOL is set to be unlocked on March 1, potentially flooding the market with additional supply. Edward Chin, co-founder of investment firm Parataxis, noted that investors are shifting capital away from speculative altcoins due to the lack of strong narratives supporting their long-term viability.
“With continued unlocks and supply hitting the market, folks are just selling,” Chin stated.
While Bitcoin has also declined by 7.50% in the past day, its drop is relatively mild compared to the 8.80% combined loss across altcoins. This has resulted in a rise in the Bitcoin Dominance Index, signaling that traders are consolidating funds into the more stable asset amid broader market uncertainty.
Trump’s Tariff Moves Stoke Risk-Off Sentiment
Beyond crypto-specific concerns, broader macroeconomic factors have contributed to the market downturn. President Donald Trump’s confirmation of new tariffs on Canadian and Mexican imports has rattled financial markets, while additional restrictions on Chinese investments in key U.S. industries have added to global economic uncertainty.
Trump’s latest statements indicate that the delayed tariffs are now scheduled to take effect next month, with the administration emphasizing the move’s role in protecting domestic industries. Meanwhile, new directives restricting Chinese investments in sectors like technology and energy have fueled concerns over escalating trade tensions.
Investors have responded by reducing exposure to riskier assets, particularly speculative cryptocurrencies. With inflationary pressures and potential interest rate adjustments looming, traders have increasingly exited altcoins and memecoins in favor of Bitcoin and other more stable investments.
Despite the steep sell-off, some analysts point to historical trends suggesting that Bitcoin’s volatility is a hallmark of bullish market cycles. Historical data from 2017 shows that Bitcoin experienced at least five major corrections of 28% or more before reaching its all-time high of nearly $20,000.
In 2017, Bitcoin saw drawdowns ranging from 27% to 39%, with the most severe dip occurring between June and July when the cryptocurrency fell by 37.04%. Another sharp 38.67% correction took place in September. Despite these downturns, Bitcoin continued its upward trajectory, eventually reaching new highs.
Raoul Pal, co-founder of Real Vision, emphasized that market participants should avoid panic during these periods of high volatility. “These drawdowns are not unusual,” Pal said. “Investors focusing on short-term price swings risk missing Bitcoin’s long-term potential.”
Technically, Bitcoin appears oversold on the four-hour chart, signaling the possibility of a short-term bullish reversal. After testing the lower trendline of its prevailing descending channel, Bitcoin is attempting to bounce, with analysts eyeing a potential rally toward the upper boundary near $98,000.
With regulatory shifts and economic pressures mounting, the next few weeks could determine whether Bitcoin stabilizes or the market plunges into a deeper correction.
