The crypto market experienced a broad-based selloff on Monday with Bitcoin plunging as much as 7.5% to hit a low of $40,521. The flagship cryptocurrency pared some losses but still traded down 3.7% on the day at $42,165 as of 1:05 pm Singapore time.
Bitcoin’s tumble below the key $40K support level came alongside heavy selling action across large and small-cap alternative cryptocurrencies. Ether, XRP, Polkadot, and Cardano all registered significant losses exceeding 3%. The top 100 crypto assets as measured by market capitalization fell in tandem, dropping around 4% overall.
Data from Coinglass showed approximately $299 million worth of leveraged crypto positions were liquidated during the sell-off as long bets unraveled. The figure marked the largest single-day liquidation value since at least mid-September 2022.
According to digital asset fund manager Richard Galvin, excessive leverage in Bitcoin markets likely exacerbated the steep decline. Galvin noted that “market leverage had risen materially,” indicating overheated greed likely set the stage for panic selling as buyers ran for the exits.
The broader risk asset sell-off comes as investors grow cautious ahead of key events that could shift monetary policy outlooks. U.S. inflation data releases and the Federal Reserve’s interest rate decision this week may spark volatility depending on how hawkish policymakers appear relative to dovish market expectations.
While some analysts anticipate the crypto correction could extend lower in the near term, supporter levels around the $37K to $40K range may stabilize the Bitcoin pullback. The leading cryptocurrency remains up over 150% in 2023 despite the latest tumble in profit-taking.
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