- Bitcoin and Ethereum’s large-scale liquidations on Binance and on retail-heavy exchanges likely ushered the recent price decline.
- Nearly $157 million in derivatives positions were liquidated within an hour on Tuesday.
- Solana-based meme coins Book of Meme, Catwifbag and Tombili the Fat Cat posted double-digit gains.
The crypto options market is known to provide early signals to corrections in the spot market. Analysts at the crypto trading firm QCP Broadcast said on Tuesday that the liquidations in the derivatives market signaled the recent Bitcoin (BTC) price decline below $66,000 and Ethereum (ETH) price drop to $3,320.
Meanwhile, Solana-based meme coins yielded gains in the past day despite the market-wide correction.
Options market predicts correction in BTC, ETH prices
Bitcoin price declined to as low as $66,000 early on Tuesday on Binance, one of the largest centralized exchanges. Ethereum, the second largest cryptocurrency by market capitalization, briefly dropped to $3,319, and cryptocurrencies suffered $157 million in liquidations.
Analysts at QCP Broadcast said in a Telegram post that the speed of Bitcoin and Ethereum’s price decline on Tuesday was due to large-volume liquidations on retail-heavy exchanges. Further, the perpetual funding rate on platforms like Binance dropped from as high as 77% to flat, stressing asset prices in the spot market.
BTC/USD 15-minute price chart
QCP Broadcast analysts expect Bitcoin and Ethereum prices to trade sideways after the correction.
Meme coins gain from whiplash in Bitcoin and Ethereum
The correction in Bitcoin and Ethereum prices was followed by likely capital rotation into meme coins as Solana-based assets noted double-digit gains on Tuesday. Data from CoinGecko shows Tombili the Fat Cat (FATCAT), catwifbag (BAG), BaoBaoSol (BAOS), Cat in a dogs world (MEW) and Book of Meme (BOME) prices rallied between 10% and 52% in the past 24 hours.
Solana-based meme coins
In the ongoing market cycle, meme coins have yielded consistent gains for traders during corrections in large assets. However, they have also registered sharp corrections afterwards. Meme coins are typically more speculative than other cryptocurrencies and investors need to be careful of rug pulls, pump and dump schemes and mass sell-offs when trading these tokens.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Dogecoin Price Forecast: Bulls deploy $355M in DOGE longs amid Gensler exit confirmation
Dogecoin price crossed $0.40 on Friday, after a weeklong consolidation that saw DOGE tumble 13% from last week’s peak. Derivative market reports link the DOGE rally to Gary Gensler’s imminent exit.
Crypto Today: XRP gains 10%, Cardano, XRP, and DOGE price rallies, delay Bitcoin’s $100K breakout
The global cryptocurrency sector pulled $230 million capital inflows on Friday, as markets reacted positively to news of SEC Chair Gary Gensler’s imminent exit.
Cardano Price Forecast: ADA could rally by another 30% as on-chain data signals bullish sentiment
Cardano (ADA) surged 24% to $0.98 on Friday following rising weekly active addresses, increased open interest and spot buying pressure.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: Rally expected to continue as BTC nears $100K
Bitcoin (BTC) reached a new all-time high of $99,419, just inches away from the $100K milestone and has rallied over 9% so far this week. This bullish momentum was supported by the rising Bitcoin spot Exchange Traded Funds (ETF), which accounted for over $2.8 billion inflow until Thursday. BlackRock and Grayscale’s recent launch of the Bitcoin ETF options also fueled the rally this week.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.