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TON performed better than most of the market as the protocol restarted its blockchain.
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Most major tokens were in the red, including AI tokens which had been riding high on anticipation of strong Nvidia earnings.
Toncoin (TON) has trimmed some of its losses as the blockchain restarted after a nearly five-hour downtime.
Though the downtime was partially blamed on the popularity of the DOGS airdrop, part of the Ton Foundation's way to raise awareness of what it believes is the unjust arrest of Pavel Durov , it wasn't a 'dog day afternoon' for the protocol's native token.
TON trimmed some of its losses throughout the east Asia trading day and is now only less than 1% according to CoinDesk Indices data . In comparison, the CoinDesk 20 (CD20) , a measure of the largest and most liquid digital assets, is down over 6.5%. The CD20 is down as a bitcoin (BTC) -led market slide caused over $300 million in crypto futures liquidations, the highest since August 5.
BTC dropped 6%, with ether (ETH) , Solana's SOL, Cardano's ADA and dogecoin (DOGE) falling over 5%. Xrp (XRP) showed relative strength with a 3.4% decline, while Tron's TRX was the best performer among majors with a 2% drop.
Ether futures racked up the highest liquidations at $102 million, followed by bitcoin at $96 million and a collection of smaller alternative tokens at $40 million.
The sudden liquidations likely contributed to a long squeeze that exacerbated losses. A long squeeze occurs when traders betting on higher prices feel the need to or are forced to sell into a falling market to cut their losses - thereby creating a cycle.
As such, CoinGlass data shows open interest on bitcoin futures is down to $31 billion from Monday's $34 billion as the asset's prices dropped - indicating waning sentiment among traders. Open interest refers to the number of unsettled futures and show whether new money is entering or exiting the market.
The dump came as U.S.-listed bitcoin exchange-traded funds (ETFs) saw over $127 million in net outflows on Tuesday, breaking an eight-day streak of inflows. Outflows on ether ETFs continued into their ninth-straight day with over $3.45 million leaving the products.
"BTC ETFs saw a very large $127 million in outflows as traders appeared to take profit after the Jackson Hole rally, while ETH continued its poor momentum with the 9th consecutive day of outflows as the Ethereum mainnet remains caught in a bit of an identity crisis," Augustine Fan, head of insights, at on-chain financial products provider SOFA said in a Telegram message.
"Short-dated volatility was bid, with traders scrambling to buy downside protection (puts), as underlying momentum remains poor from the supply overhang and lack of on-chain catalysts in the near term," she continued.
AI tokens are also in the red, even though the prospect of Nvidia producing blockbuster earnings made some investors move into AI tokens.
NEAR is down 10%, according to CoinDesk Indices data, while ICP is down 6.5%, FET is down 11.8%, and Bittensor's TAO is in the red 11.3%, while RENDER (RNDR) dropped 9.5%.
"Sentiment around AI has definitely shifted, as seen in the performance of AI tokens and NVIDIA. After a pullback and recovery, NVIDIA still holds significant influence, especially with its upcoming earnings report," Fairlead Strategies founder and Managing Partner Katie Stockton said on a recent interview on CoinDesk TV.
"This could either push the market higher before a potential September correction or start that correction. We expect NVIDIA and the mega caps to enter a more range-bound environment amid increased volatility, regardless of AI exposure," she continued.
Elsewhere, Hong Kong-based custodian Hex Trust announced that it had launched a staking partner program, giving clients further access to staking offerings, signaling continued institutional interest in the asset class.