On December 5, the cryptocurrency market experienced significant turmoil, leading to over $500 million in liquidations, with memecoins suffering the most. This development raises alarms about persistent volatility, particularly as the market heads into the weekend.
According to data from Coinglass, approximately $499.27 million in positions were liquidated within a single day, comprising $419.19 million in long positions and $80.08 million in shorts. This liquidation wave affected more than 142,000 traders, underscoring the extreme volatility present in the sector.
The largest liquidation event occurred on the BTC-USD market of Hyperliquid, where a position valued at $8.5 million was forcibly closed. Such incidents highlight a worrying trend where large-scale liquidations often happen during periods of low liquidity, particularly when U.S. trading sessions conclude and the market prepares for the weekend.
This pattern of Friday liquidations indicates underlying structural weaknesses in the market. With U.S. public companies now holding over 1 million BTC, translating to nearly $94 billion, institutional investments are becoming increasingly integrated into the cryptocurrency landscape. The recent $500 million liquidation mirrors previous significant liquidation events, including one on October 10, when nearly $20 billion in leveraged positions vanished following the announcement of new tariffs impacting tech imports from China.
Recent weeks have seen similar trends, such as on November 14, when traders exited nearly $1.4 billion in positions, causing a notable drop in Bitcoin prices below $100,000. The current market sentiment suggests that traders are once again retreating with $500 million in leveraged exposure as they brace for another low-liquidity weekend.
The memecoin sector, characterized by its sensitivity to market sentiment, has been particularly hard hit, with the total market capitalization for memecoins decreasing by 5.6% to $46.18 billion. Trading volumes reached $4.24 billion within 24 hours, illustrating the frantic effort to exit positions.
Among the memecoins, PEPE saw a price drop of 10.5%, while PENGU and Shiba Inu (SHIB) recorded declines of 9.4% and 5.9%, respectively. Even more established memecoins like Dogecoin (DOGE) fell by 7.2%, reflecting a broader trend of investor exit.
As traders remain wary, interest has shifted towards early-stage projects such as SUBBD, which combines AI-driven personalization with creator monetization, enabling influencers and brands to foster fan communities. The presale for SUBBD has already surpassed $1.4 million, nearing its $1.5 million target, with tokens currently valued at $0.057 each.
In conclusion, the recent market events signal ongoing challenges for the cryptocurrency sector, particularly within the memecoin space. Traders and investors must remain vigilant as the market grapples with these liquidations and the implications of low liquidity heading into the weekends.
Disclaimer: Coinspeaker strives to deliver unbiased and accurate reporting. The information provided in this article is for informational purposes only and should not be considered financial or investment advice. Always consult with a professional before making investment decisions.
Author: Ibrahim Ajibade, a research analyst with experience supporting various Web3 startups and financial organizations, is currently pursuing a Master”s in Blockchain and Distributed Ledger Technologies at the University of Malta.
