- Traders lost millions of dollars as a result of the widespread correction.
- ADA, SHIB and DOT volumes have increased, but that may not be good news.
Triggered by Bitcoin [BTC] steep drop to $67,640, Shiba Inu prices [SHIB]Dot [DOT]and Cardano [ADA] has undergone steep corrections in the past 24 hours.
At the time of writing, SHIB was down as much as 11.87%. This set the price back when it changed hands at $0.000029. However, the memecoin’s price wasn’t the only metric affected. As a result of the price drop, Shiba Inu’s market capitalization fell out of the top 10.
DOT, on the other hand, registered a decline of 4.27% within the same period as its value fell to $10.64. ADA, which was earlier heading for $0.80, fell 5.95% while trading at $0.71.
The storm crushes the excitement
According to AMBCryptos analysisthe turbulence caused massive liquidations in the market. In the context of the crypto market, liquidation is typically caused by adverse market movements.
Source: Coinglass
It occurs when an exchange forcibly closes a trader’s position because there is not enough money to keep it open. Within the last 24 hours, SHIB Longs has suffered a loss worth $1.19 million.
However, Coinglass’ Liquidation Heatmap showed that the liquidation of shorts was worth $316,410
It was a similar situation for ADA and DOT as there were more long liquidations than short liquidations. In addition to the loss of traders’ funds, AMBCrypto also noticed that the volume of these cryptocurrencies dropped jumped.
At the time of writing, Cardano’s volume had increased to 1.85 billion. Polkadot’s volume rose to 1.06 billion, while Shiba Inu’s volume initially rose to 2.81 billion before falling to 2.50 billion.
Typically, rising prices with rising volumes indicate a healthy upward trend. But in the case of SHIB, DOT and ADA, falling prices with increasing volume indicate that values could be gaining strength in the south.
Source: Santiment
Are these dips to buy?
If volume continues to rise while prices fall, the value could fall further. However, declining volume could make the downtrend weak and likely promote a recovery.
In terms of the financing rate, data about the chain showed that it was positive on all three sides. A positive financing rate means that the perp price was trading above the cash value.
When this happens, it becomes more expensive for traders to keep their positions open. To avoid possible liquidation, traders can sell the offender, buy the spot and take the financing interest as an incentive.
Source: Santiment
Realistic or not, here is SHIB’s market cap in ADA terms
From a price-based perspective, the positive funding rate as price moves lower could be bearish for ADA, SHIB, and DOT. In a situation like this, longs’ aggression is intense, but rewards seem to fail to materialize.
Therefore, this could cause the respective prices to provide resistance rather than support. However, a further decline might not be entirely bad as participants could have a chance to buy the dip before the next rise.