The cryptocurrency market continued to decline this week, with Bitcoin (BTC) further dropping to the $100,000 level on Tuesday, causing many altcoins to be in a free-fall state.
Among the most affected cryptocurrencies, XRP, Polkadot (DOT), Litecoin (LTC), Aptos (APT), and Cardano (ADA) fell by 15%-18% in the past 24 hours, continuing the downward trend from Monday. The CoinDesk 20—a market capitalization index of the top 20 cryptocurrencies excluding meme coins, stablecoins, and exchange tokens—dropped nearly 10%. Most cryptocurrencies in the index fell by at least double-digit percentages, although Ethereum's Ether (ETH) and Solana's SOL fell by 8% and 9%, respectively.
In contrast, Bitcoin performed relatively better, dropping to $95,000, down nearly 3% in the past 24 hours. The cryptocurrency had already seen a significant drop on Monday, triggering one of the largest leverage liquidations in recent years, liquidating over $1.5 billion in bullish derivative positions. Tuesday's drop led to $450 million in digital asset liquidations, primarily bullish bets, according to CoinGlass data. The open interest in Bitcoin futures remains at a historical high of nearly $58 billion, although it has decreased by 6.8% since Sunday.
This week's sell-off occurred after a month of rapid price increases following Donald Trump's election in early November. Some major altcoins doubled or more in price, while Bitcoin first broke the $100,000 threshold.
Bitcoin's market dominance, or its share of the entire cryptocurrency market, surged to 57.9% on Tuesday, the highest level since the end of November, highlighting a general risk-averse trend in the market shifting from altcoins to Bitcoin.
These market movements may be due to expectations surrounding the inflation data set to be released on Wednesday, as Youholder's chief market analyst Ruslan Lienkha stated in an email to CoinDesk: "The market expects inflation to rise slightly. However, if the CPI numbers come in higher than expected, it could exacerbate the ongoing correction in financial markets. In that case, the timing and possibility of Federal Reserve rate cuts will become a key focus as we enter the new year." Nevertheless, the stock market has not suffered as severely as cryptocurrencies. After a slight decline on Monday, major U.S. stock indices remained stable today.