The cryptocurrency market experienced a tumultuous 24 hours, with the majority of altcoins plummeting by over 5%. This widespread volatility has created chaos in the derivatives sector, resulting in a substantial number of liquidations.

Data from CoinGlass reveals that the derivatives market has witnessed the liquidation of contracts worth approximately $429 million in the past 24 hours. A contract is considered "liquidated" when the platform is forced to close it due to accumulated losses beyond a certain threshold.

The past day has seen long contract holders bear the brunt of these forceful closures, with around $367 million of the liquidations, accounting for more than 85% of the total, involving traders who had bet on a bullish market outcome. The primary reason for these lopsided liquidations lies in the fact that cryptocurrencies have experienced a sharp downward trajectory during this period.

A heatmap illustrates the contribution of individual assets to this derivatives flush. Unlike typical violent liquidation events, Bitcoin (BTC) is not leading the charts in this metric. Instead, Ethereum (ETH), the second-largest cryptocurrency by market capitalization, tops the list with around $92 million in liquidations.

This can be attributed to the fact that Bitcoin has moved relatively sideways during this period, while Ethereum has witnessed a drop of over 3%. Interestingly, the memecoins Dogecoin (DOGE) and Shiba Inu (SHIB) follow these top coins, with liquidations amounting to $60 million and $23 million, respectively.

These altcoins have experienced the sharpest declines among the top cryptocurrencies, with drops of around 11% each. This, combined with the fact that memecoins typically receive more speculative activity, could explain why DOGE and SHIB are ahead of coins other than ETH or BTC. Despite this, the difference between Dogecoin and Bitcoin is currently a mere $10 million, which is impressive considering the market capitalization difference between the two assets.

A mass liquidation event like this is commonly referred to as a "squeeze." During these events, liquidations can cascade together like a waterfall, causing even higher volatility in the market. As the longs took an overwhelming majority of the latest liquidations, the event would be classified as a "long squeeze."

Squeezes are not uncommon in the cryptocurrency market due to the generally high volatility of the various coins. However, an altcoin-dominated squeeze of this scale is not a regular occurrence.

Following this latest plunge, Ethereum, the largest among the altcoins, has dropped to the $3,400 level. The cryptocurrency market remains highly unpredictable, and investors must exercise caution and stay informed about market trends and fluctuations.