(Bloomberg/Sidhartha Shukla and Suvashree Ghosh) — Cryptocurrency traders saw more than $1.5 billion in bullish wagers liquidated on Monday, triggering a sharp selloff that hit smaller tokens hardest.
Ether slumped as much as 9% to $4,075 as nearly half a billion dollars of leveraged long positions in the second-largest token were liquidated, according to data from Coinglass. Bitcoin declined 3% to $111,998 at one point. Coins like Solana, Algorand and Avalanche also slipped.
Demand from publicly-listed vehicles set up to hoard tokens helped drive Bitcoin and Ether to all-time highs in August. That momentum has started to fade as shares of digital-asset treasury firms ranging from Michael Saylor’s Strategy to Japan’s Metaplanet Inc. retreated.
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“It feels like the market needs a breather, with some participants concerned that the ‘DAT-trade’ is losing steam and there are no more meaningful inflows on the horizon,” said George Mandres, senior trader at XBTO Trading.
On Monday, more than 407,000 traders were liquidated over a 24-hour period, the Coinglass data show. The selloff dragged the overall digital-asset market size below $4 trillion, according to data from CoinGecko.
Bitcoin has been mainly trading in a range of $110,100 and $120,000 since early July. During that period, Ether and Solana grabbed the spotlight among crypto traders, rallying 74% and 52% respectively since the start of July.
The sideways trading in Bitcoin comes as gold, the precious metal the original cryptoasset is often compared with, notches near-daily records. Gold reached an all-time high of almost $3,720 an ounce on Monday. Silver also advanced.
Easing monetary policy in the US has been a big factor in pushing gold and equities higher, although Bitcoin has had a more muted response to the Federal Reserve’s quarter-point rate cut last week. Some Bitcoin bulls argue that gold’s relentless rally could soon start pulling the token higher.
“The disappointment stands out compared to tradfi, where equities have held up relatively better while crypto underperforms, reinforcing the sense that this move is more idiosyncratic to the asset class,” Sean McNulty, Asia-Pacific derivatives trading lead at FalconX.
Bitcoin was trading at around $112,700 and Ether at $4,200 as of 10:02 a.m. in London.
(Updates with detail throughout.)
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