Altcoins Experience Sharp Declines as Bitcoin Stagnates: Over $1 Billion Liquidated in 24 Hours

The cryptocurrency market witnessed significant turbulence as Bitcoin (BTC) continued its sideways trading trend while major altcoins, such as XRP, faced steep drops. Within a 24-hour period, over $1 billion in crypto positions were liquidated, highlighting the growing instability. This volatility unfolded against the backdrop of tightening market liquidity and heightened regulatory uncertainty after the U.S. Securities and Exchange Commission (SEC) reversed its initial approval of a digital asset ETF.

As of 8:30 a.m. KST on October 24, Bitcoin was priced at 162.13 million KRW on South Korea's Upbit exchange, recording a slight 0.11% dip compared to the previous day. On Binance, Bitcoin traded at $11,855, reflecting a sharper decline of 1.26% over the same period. The broader cryptocurrency market mirrored this downtrend, with the CoinDesk 20 Index—tracking the top 20 cryptocurrencies by market capitalization—falling by 5.54%. Key altcoin players were hit hard: Ethereum (ETH) dropped 3.1%, Solana (SOL) slid 7.08%, and XRP suffered a staggering 9.99% loss, spearheading the altcoin downturn.

Liquidation Data Highlights Broader Market Pain

According to liquidation data aggregated by Coinglass, approximately $66.73 million (91.8 billion KRW) worth of Bitcoin positions were liquidated over the past 24 hours, with a staggering 80.09% of these being long positions. Market-wide, total liquidations surged to $745.74 million (roughly 1.02 trillion KRW), with Ethereum accounting for the largest share at $157 million (216.1 billion KRW).

The dramatic decline in altcoin values can be largely attributed to poor market liquidity. While Bitcoin maintained an active order volume of around $40 million on platforms like Binance and Coinbase—enough to support a 2% price move—altcoins like XRP lagged behind, with an order volume of only $5 million to $6 million. This relative illiquidity makes smaller cryptocurrencies more susceptible to sharp price swings and deeper losses, especially when hit by moderate sell orders.

SEC’s ETF Approval Reversal Fuels Investor Uncertainty

Adding to the volatility was a fresh wave of regulatory uncertainty. On October 23, the SEC Division of Trading and Markets approved Bitwise's application to convert its "Top 10 Digital Assets Index Fund" into an exchange-traded fund (ETF), igniting optimism within the digital asset ecosystem. However, later the same day, Sherry Haywood, an associate secretary at the SEC, issued an unexpected "indefinite stay" order, effectively halting the ETF’s progression.

Usually, financial products like ETFs receive approval through either a commission-wide SEC vote or delegated authority. Yet, even after a delegated decision is made, an individual SEC commissioner has the power to call for a formal review, which can delay implementation. This process was utilized to disrupt the approval timeline for Bitwise's proposed ETF.

A Bitwise representative expressed optimism despite the setback, stating, “Our conversations with the SEC have been constructive under the current administration. We're committed to increasing accessibility to digital assets.” Meanwhile, the SEC has yet to release a formal statement addressing the situation.

Commenting on the matter, Adam Gana, an attorney from Gana Weinstein LLP, criticized the SEC’s inconsistent handling of digital asset approvals, stating, “This rapid reversal reflects a lack of clear direction in the SEC's approach to crypto assets. It fosters investor confusion and undermines market confidence.”

Market Sentiment Shows Resilience Amid Volatility

Despite the mounting challenges, investor sentiment appears relatively stable. According to the Fear & Greed Index compiled by Alternative, sentiment surrounding the crypto market slightly improved. The index rose to 74 (Greed) from the prior day’s 72, signaling an uptick in bullish sentiment. The index, which ranges from 0 (Extreme Fear) to 100 (Extreme Greed), provides a snapshot of overall market mood, with higher scores reflecting stronger buy pressure.

The combination of regulatory unpredictability and persistent liquidity issues highlights the precarious nature of the cryptocurrency market. Structural weaknesses—exacerbated by policy inconsistencies—are adding to the pressure, creating an environment where both investors and projects must navigate heightened risks. Nevertheless, sentiment indicators suggest underlying investor optimism, hinting at potential recovery as clarity emerges around regulatory actions and liquidity challenges.