On Tuesday, the crypto market experienced one of its worst trading days in recent months, with major and midcap tokens seeing a sharp decline during early Asian trading hours. Bitcoin (BTC), however, remained relatively stable.

XRP, Dogecoin (DOGE), and Cardano’s ADA saw significant losses, dropping by up to 15% in the past 24 hours, with selling pressure building through late U.S. trading hours and accelerating into the Asian session. Bitcoin dropped 3%, while Ether (ETH) and Solana (SOL) both saw a 7% decrease. Tron’s TRX suffered a 17% plunge, nearly erasing all of last week’s gains.

The total market capitalization of cryptocurrencies dropped by 6.5%, marking the largest fall since October, with the CoinDesk 20 (CD20) index shedding 7%.

While no single event triggered the sell-off, it came shortly after Google revealed its new Willow quantum computing chip and the results of benchmark tests, which raised concerns within the crypto community regarding the future of crypto privacy and wallet security.

Earlier warnings from market analysts and traders about potential short-term selling pressure due to an overheated market following the November rally seemed to have played out, as reported by CoinDesk on Monday.

The downturn resulted in over $1.5 billion worth of long positions being liquidated, the highest liquidation figure since 2021. Altcoin futures tracked under “Others” by CoinGlass saw the largest losses, totaling $560 million. Dogecoin and XRP futures alone accounted for over $70 million in losses each.

Some market analysts pointed out that the selling pressure began on Coinbase, where unusual market activity impacted XRP, and suggested that traders may have been over-leveraged.

“Something very strange happened,” said well-known quant trader @ltrd_ on X. “We saw a wave of large sell orders in a mature market, causing the market to drop by over 5%. It’s unusual and we don’t know exactly what caused it.”

“These sell orders don’t appear to be normal,” they added. “It’s possible that a major player was forced to sell in a panic.”

Liquidations occur when an exchange closes a trader’s leveraged position due to the trader’s inability to meet margin requirements. These large-scale liquidations often indicate extreme market conditions, such as panic selling or buying, and can signal a potential turning point in the market, where prices might reverse due to an overreaction in sentiment.