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The crypto market cap plummeted over 4% in the past 24 hours in a flash crash that saw Bitcoin (BTC) plunge below $67K and the top 10 cryptos all suffer substantial losses.
BTC saw its price fall more than 4%, while altcoin leader Ethereum (ETH) shed more than 5% of its value over the past day of trading.
Dogecoin (DOGE) was the biggest loser among top cryptos by market capitalization with a 9% plunge, trailed closely by Avalanche (AVAX) with more than 8%.
Crypto Flash Crash Ignited By Long-Term Holders
The selloff also brought an end to the positive streak for Solana (SOL), which plunged 7% to trade at $182.37 as of 5:50 a.m. EST.
Meanwhile, Binance Coin (BNB) and XRP both tumbled more than 3%, while Cardano (ADA) dropped 6%.
Crypto exchange Bitfinex attributed the drop to long-term holders (LTHs) taking profits after Bitcoin hit new all-time highs. It added that this selling is on a smaller scale than during previous bull market peaks.
Despite selling pressure from LTHs, analysis using UTXO Age Bands indicates buying activity. This serves as a support level, driven by new investors joining and existing investors increasing their positions, showing belief that the market can go higher 📈https://t.co/LJrGTOQ6Y1
— Bitfinex (@bitfinex) April 1, 2024
Bitfinex analysts estimate that more than $2.6 billion in profit was captured through on-chain transactions in the past three weeks. About 40% of this profit-taking is linked to the LTH group, the exchange said in a blog post.
US Dollar Rises Off The Back Of Positive Fundamentals
The strength of the US Dollar also played a role in the crypto market’s flash crash after data showed the US manufacturing sector grew in March for the first time since September 2022, according to a Reuters report.
Robust consumer spending and stabilizing inflation suggest a potential recovery for several sectors is on the cards, Bitfinex said.
Dollar Index Chart (Source: TradingView)
Despite the selloff, crypto presales continue to soar. Even though Dogecoin (DOGE) slumped, Dogecoin20 has extended its presale after overwhelming demand powered it past $10 million.
And new Solana meme coin Slothana ($SLOTH) has raised $5.8M in a little more than a week.
SLOTH is following in the footsteps of $SLERF, $BOME, $PUMP, and $PUNDU, meme coins that introduced a new way of launching on Solana that skips traditional price stages and timers for presales where people send $SOL to a token address.
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