The cryptocurrency market has experienced a significant downturn, with a 6% drop in the wider crypto realm in the past few hours. Currently, Bitcoin (BTC) has seen a 5.6% decline, trading at $66,654 and holding a market cap of $1.311 trillion. Other altcoins in the top ten are also facing substantial corrections ranging from 6-10%.

Massive Liquidations in the BTC Market

Coinglass data reveals that over $500 million has been liquidated in the crypto market during this sharp correction. Of this amount, $414 million comes from liquidating long positions, while $85 million is from liquidating short positions.

Bitcoin liquidations account for $66 million of this total, with other altcoins contributing to the rest. Recent reports from QCP Capital highlight significant options market activity, with a notable interest in selling calls and purchasing puts for both Bitcoin (BTC) and Ethereum (ETH). This trend has put downward pressure on spot prices while maintaining high levels of implied volatility, particularly noticeable in ETH.

Concerning Ethereum, the demand for puts has surpassed that of calls in the short term, resulting in a downside risk reversal skew of -5% for April. This skew indicates a prevailing inclination towards downside protection in the options market for ETH, reflecting traders' cautious outlook on possible price movements soon.

Meme Coins Experience a Downturn

There has been substantial selling pressure in the meme coin sector, known for its recent popularity. Despite Dogecoin (DOGE) surging to 22 cents over the past weekend, it has since dropped by 13% to $0.1881 at present. Other meme coins like Shiba Inu (SHIB), Dogwifhat (WIF), among others, have also faced steep corrections.

Amid dwindling speculative enthusiasm in the crypto sphere, the perception of potential looser monetary policies in the US encounters challenges. In the last day, coins previously favored by meme-trading communities, such as Pepe, dogwifhat, and Bonk, have experienced declines in their valuations.