Altcoin Market Slides as Bitcoin Reclaims Dominance Amid $200M Liquidations
Altcoins suffered a broad sell-off on Wednesday, triggering over $200 million in long position liquidations and lifting Bitcoin’s market dominance back above the 60% mark. The sharp pullback reflects waning risk appetite just as the altcoin rally appeared to gain traction.
XRP and Ethereum bore the brunt of the correction, with $32 million and $43 million in liquidations respectively. XRP dropped 5.2% on the day, while Solana (SOL) and Toncoin (TON) plunged 7% and 11%, respectively.
The losses were amplified by thin order book liquidity across altcoin markets. While Bitcoin’s 2% market depth stands near $40 million per side on major exchanges like Binance and Coinbase, altcoins like XRP average just $5–$6 million—leaving them vulnerable to heavy slippage during larger market sells, even before liquidation cascades set in.
Despite last week’s technical breakouts, many altcoins are now testing critical support levels. Ethereum faces a key threshold at $3,470—previous resistance that must now hold as support to avoid deeper downside. A sustained break below that level could trigger a broader unwind in leveraged altcoin positions.
Open interest in ETH remains historically elevated near $24 billion, more than double its 2021 bull market peak. This indicates a market still driven largely by leverage, raising the risk of further liquidations if price support fails.
Meanwhile, CoinMarketCap’s altcoin season index slipped from 55 to 47, reflecting a broader rotation back into Bitcoin. Analysts suggest altcoins may regain momentum only if BTC breaks decisively above $124,000 and consolidates, freeing up capital to rotate into higher-beta assets.
Until then, Bitcoin’s relative stability appears to be attracting flight-to-quality flows as traders de-risk across the broader crypto complex.
