$412 Million Liquidated as Bitcoin (BTC) Slips Below $100,000 Again

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As a seasoned analyst with over two decades of experience in financial markets, I’ve seen my fair share of market volatility and panic. However, the recent Bitcoin plunge below $100,000 has left me more bewildered than anything else. It seemed like a sure thing that BTC would hold its ground above six figures, but alas, we are witnessing a freefall instead.

Bitcoin’s current price is around $98,106 and has experienced a 1.7% volatility over the past 24 hours. This volatility has led to a significant drop in its value, causing a wave of concern among traders. In just 24 hours, this market turbulence has resulted in the erasure of $412 million worth of leveraged positions. This sudden decline below the $100,000 mark has left some investors questioning their belief that reaching six figures would signal stability rather than a freefall.

According to data from CoinGlass, it’s been found that about 79.57% of the instances where traders were forced to sell their positions (liquidations) happened in long positions. Major platforms such as Binance, OKX, KuCoin, and Bybit have experienced significant losses, even setting new records for such losses.

A Market Meltdown

161,442 traders were impacted by the numerous closures, and it’s estimated that around 12.62% or roughly $52 million of the overall amount was tied to Bitcoin (BTC).

The ripple effects of liquidation were felt not just by Bitcoin but also by Ethereum, causing turbulence across the broader crypto landscape. With a market value of approximately $465 billion, Ethereum, often referred to as the second cornerstone of the market, experienced around $46 million in liquidations over the past 24 hours. The majority of these losses were sustained by long traders who had speculated on prices exceeding current levels.

On December 6th, I observed Ethereum surpassing $4000 for the first time since March 2024, although it only briefly reached that threshold. Despite this recent recovery, Ethereum, which is owned by Vitalik Buterin, hasn’t gained enough momentum to break free from its current cycle. Moreover, it’s yet to approach its previous all-time high of 4,878, a record set in November 2021 during the last bull market.

Besides Ethereum, the altcoins Ripple (XRP), Cardano (ADA), Dogecoin (DOGE), and others experienced liquidations totaling approximately $108.02 million in a 24-hour period. During this timeframe, XRP had a volatility of 6.5%, trading at around $2.38 with a market cap of $136.44 billion and a 24-hour volume of $11.87 billion. Similarly, ADA had a volatility of 8.3% and was trading at about $1.12, with a market cap of $40.05 billion and a 24-hour volume of $1.97 billion. DOGE also saw a volatility of 6.0%, trading around $0.43, while maintaining a market cap of $63.65 billion and a 24-hour volume of $8.48 billion.

What Went Wrong

The recent stock market crash can be traced back to geopolitical instability, specifically the announcement of martial law made by South Korean President Yoon Suk Yeol on December 3. During a live broadcast, he explained that this action was taken due to perceived threats from North Korea’s communist forces and was intended to eradicate anti-government elements.

The news sparked a major reaction in South Korea’s financial industry, particularly in the cryptocurrency sector. On local platforms such as Upbit, Bitcoin’s value relative to the South Korean won fell by 30%. This dramatic decrease was felt worldwide, causing Bitcoin’s price to dip down to approximately $96,000.

During a Cabinet meeting, President Suk Yeol unexpectedly changed his stance on martial law. At approximately 4:30 a.m., this decision was lifted after 190 out of 300 parliament members voted against the order, as reported locally. Although this move reduced political tension, the harm to market trust had already been inflicted.

In simpler terms, the ongoing international conflicts, combined with concerns about increasing U.S. government bond rates and possible regulatory actions, led to a situation where all markets experienced a significant drop in value. Traders who had borrowed money to trade (leveraged traders) were especially affected as their losses triggered a series of events that worsened the market decline, making prices even more unstable.

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2024-12-09 14:51