In a dramatic turn of events, the cryptocurrency market has witnessed a notable correction, with Bitcoin, the flagship cryptocurrency, leading the downward spiral. As Bitcoin’s price plummeted, over $500 million worth of positions were liquidated, sending shockwaves throughout the market. Additionally, meme coins, which had captured the attention of traders in recent weeks, faced a steep correction, hinting at a potential shift in sentiment among investors.

The sudden downturn saw Bitcoin’s price dropping by 5.6%, with the cryptocurrency trading at $66,654 at press time. This decline in value resulted in a market cap of $1.311 trillion, marking a significant setback for the leading digital asset. The broader altcoin market also experienced heavy losses, with the top ten altcoins witnessing corrections ranging from 6% to 10%.

One of the most significant aspects of the market correction was the staggering amount of liquidations that occurred. According to data from Coinglass, more than $500 million worth of positions were liquidated across the crypto market during the downturn. Long positions bore the brunt of the liquidations, accounting for $414 million, while short positions contributed $85 million to the total figure.

Bitcoin alone saw liquidations amounting to $66 million, underscoring the impact of the correction on the largest cryptocurrency by market capitalization. Notably, the options market also witnessed heightened activity, with traders showing significant interest in selling calls and purchasing puts for both Bitcoin and Ethereum.

This trend in the options market exerted downward pressure on spot prices while maintaining elevated levels of implied volatility, particularly evident in Ethereum. Demand for puts in Ethereum notably surpassed that of calls in the near-term, resulting in a downside risk reversal skew of -5% for April. This skew indicates a prevailing sentiment toward downside protection in the options market, reflecting cautious sentiment among traders regarding potential price movements in the near future.

In addition to the correction in major cryptocurrencies, meme coins, which had been the subject of much speculation and hype in recent weeks, also faced strong selling pressure. Dogecoin, one of the most prominent meme coins, experienced a surge in price over the weekend, reaching 22 cents before plummeting by 13% to $0.1881 at press time. Similarly, other meme coins like Shiba Inu and Dogwifhat also entered a steep correction, signaling a potential end to the speculative frenzy surrounding these assets.

The decline in meme coins comes amidst diminishing speculative fervor in the cryptocurrency realm, as traders reassess their investment strategies in light of the market correction. Additionally, the prospect of looser monetary policy in the United States encounters obstacles, further contributing to the downturn in certain assets.

The significant liquidations, as reported by Coinglass, paint a grim picture of the market’s recent performance. Long positions bore the brunt of the losses, accounting for $414 million in liquidations, while short positions faced $85 million in liquidations.

Bitcoin alone contributed $66 million to the total liquidation figure, highlighting the widespread impact of this correction across the crypto landscape. Notably, the options market has seen heightened activity, with a particular interest in selling calls and purchasing puts for both Bitcoin and Ethereum.

This surge in options trading has exerted additional downward pressure on spot prices, while also driving up implied volatility, especially evident in Ethereum. Traders have shown a preference for downside protection, with demand for puts outweighing that of calls, leading to a negative skew in risk reversal for April.

Over the last 24 hours, previously favored coins among meme-trading communities, such as Pepe, dogwifhat, and Bonk, saw declines in their values, further indicating a shift in sentiment among traders. As the cryptocurrency market navigates through this period of volatility, investors are advised to exercise caution and closely monitor market developments to make informed decisions.