The cryptocurrency market, led by Bitcoin (BTC), has experienced low bullish sentiments in the past five days. The total crypto market cap slipped 4 percent in the past 24 hours to hover about $3.03 trillion on Friday, November 15, during the early Asian session.
Bitcoin price dropped over 2 percent in the last 24 hours to trade at about $87,786 at the time of this writing. In the top 10 crypto assets, only Ripple Lab’s XRP registered palpable gains of about 18 percent to trade at about $0.82.
Major Factors that Contributed to Crypto Selloff
Low Demand from Institutional Investors
The initial demand for Bitcoin and other crypto assets recorded after the U.S. elections has gradually dwindled in the past week. On Thursday, the US spot Bitcoin ETFs ended a six-day winning streak with a net cash outflow of about $400 million.
Similarly, the US spot Ether ETF ended a seven-day streak of notable cash inflow with a net cash outflow of about $3.2 million on Thursday.
Consequently, the crypto market is expected to register a short-term correction before continuing with the macro bull run.
Cooling-off in the Leveraged Markets
After an impressive rally last week following the overwhelming victory of Donald Trump, the cryptocurrency market has been trapped in a short-term correction in the past few days. Bitcoin price has slipped from a peak of over $93k to hover below $88k on Friday.
Since the beginning of this week, more than. $3 billion from the crypto-leveraged market has been liquidated. In the past 24 hours, over $510 million was liquidated, mostly involving long traders.
As a result, long traders have gradually opened short positions to minimize their losses, thus increasing the impact of a long squeeze.
