$420 Million in Crypto Liquidation as Bitcoin (BTC) Price Falls

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As a seasoned crypto investor with a decade of experience under my belt, I’ve seen my fair share of market volatility and liquidations. This recent dip in Bitcoin‘s price is nothing new, but it’s always a reminder that the crypto market can be as unpredictable as a rollercoaster ride.

Bitcoin (BTC) experienced a minor dip, leading to some liquidations within the crypto market. As BTC dropped by 2.99%, its current trading price is now $104,027.71, resulting in 165,326 traders experiencing liquidation events with a total liquidated value exceeding $420 million. The largest single liquidation took place on the Binance exchange, as per CoinGlass data.

Long Traders Take the Hit in Crypto Liquidation

Despite a decline in Bitcoin’s price, it wasn’t Bitcoin that saw the largest liquidation; rather, it was other digital currencies. In fact, over the past 24 hours, a staggering $76.7 million was liquidated from Bitcoin, whereas a greater amount of $100.98 million was liquidated from other cryptocurrencies.

Out of all the Bitcoin that was liquidated, approximately $54.1 million worth was due to long traders overestimating the value of the cryptocurrency.

It seems that the rise in the coin’s cost recently may have contributed to their positive wager. Regrettably, they found themselves on the wrong side of the market when the BTC price began to drop following its peak at $108,000. At present, traders who had speculated a decline in Bitcoin are confronted with liquidations amounting to more than $22 million.

Aside from Ethereum ($3,884) with a 24-hour volatility of 2.8% and a market cap of $467.72 billion, along with a 24-hour volume of $38.16 billion, the industry’s top meme coin, Dogecoin ($0.39), also experienced losses worth around $55.54 million. Additionally, Ripple (XRP) suffered a loss of about $13.16 million. Recently, when Bitcoin reached $106,000, traders faced a collective loss of approximately $320 million within 24 hours, with an additional $8 million disappearing from the market in just one hour. During this period, short traders suffered more losses, while long traders experienced relatively modest drains.

Initially, Bitcoin (BTC) accounted for approximately $120 million in total liquidations. This amount is further divided: around $104 million was lost by those holding short positions, while long traders incurred a comparatively smaller loss of almost $16 million.

According to recent patterns, the market typically experiences selling off or liquidation whenever the price of Bitcoin hits a new all-time high (ATH).

What Happened to Bitcoin Price?

Various experts are contemplating reasons behind Bitcoin’s recent price drop. Potential factors might be the upcoming decision on interest rates by the U.S. Federal Reserve, which will be revealed today.

Financial experts predict that the central bank will lower interest rates by a quarter point (25 basis points). However, there’s a lot of speculation about when the Federal Reserve might make this shift, which keeps the market in a state of anticipation.

As a researcher examining current economic trends, I share Mark Cuban’s viewpoint that the U.S. central bank may choose to reduce interest rates by 25 basis points in the near future. This potential move stems from growing apprehensions about the long-term effects of maintaining a tight monetary policy. As we enter the new year, there is a prevailing worry among experts that the U.S. Federal Reserve might only implement three rate cuts, rather than pursuing a more aggressive easing strategy to support economic growth.

Currently, traders are showing clear signs of being careful before making any investment decisions in the market. Arthur Hayes, a former CEO of BitMEX, anticipates that the Bitcoin and crypto market could experience significant volatility around Donald Trump’s inauguration ceremony, which is scheduled for January 20, 2025.

Since Bitcoin first fell below $104,000, it has rebounded and is set to reclaim the $105,000 mark.

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2024-12-18 15:06