Bitcoin Crashes to $97K, Triggers $400M Market Wipeout

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Bitcoin (BTC) fell short of the $100,000 mark after experiencing a surge of 3.94% on Monday, only to lose these gains on Tuesday. This led to a significant drop in value, causing BTC to fall below the $2 trillion market capitalization and reaching its lowest point at $97,153. Currently, Bitcoin is trading at $97,785.84, representing a decrease of 4.27%.

Based on CoinMarketCap’s statistics, Bitcoin currently holds a market capitalization of approximately $1.93 trillion and a dominance level of 56.4%. On Tuesday, it reached a peak of around $102,000, but subsequently encountered resistance and plummeted. If Bitcoin recovers, further attempts to surpass the $100,000-$102,000 price range might occur, given that it finds support between $96,000 and $97,000.

Conversely, data obtained from Coinglass indicates a significant amount of liquidation occurred within the last 24 hours, totaling approximately $381.56 million. Of this sum, about $331.20 million was long positions and $50.36 million were short positions. Over the past four hours, the market has seen a considerable reduction of over $240 million, with $216.87 million from long positions and $23.12 million from short positions being wiped out.

Bullish Sentiment Persists Despite $400M Liquidation

Currently, the Crypto Fear & Greed Index indicates optimism, as investors appear eager to purchase more digital currencies even during this temporary market dip within an extended bullish trend. Last week, the index showed a neutral reading of 48, but it has since risen significantly to 66, reflecting increased investor greed.

According to previous reports, Bitcoin was projected to reach approximately $112,000 due to growing investor interest and a substantial inflow of $987.06 million into US spot Bitcoin exchange-traded funds (ETFs) on January 6th, as indicated by data from SoSoValue. Additionally, optimism about Bitcoin was fueled by the upcoming inauguration day of President-elect Donald Trump on January 20th.

Why Did Bitcoin Crash?

The value of Bitcoin fell in November 2024 after the US Bureau of Labor Statistics announced a rise of 259,000 in job openings to 8.09 million. This strong jobs report indicates that the Federal Reserve might not need to lower interest rates as much in 2025 due to an improving economy.

Additionally, the ISM Services PMI, a gauge of U.S. business activity, surpassed expectations, suggesting a stronger economy in the United States. This positive trend might lead to fewer interest rate reductions that investors could anticipate in 2025. It’s worth noting that lower rates tend to boost Bitcoin’s appeal since they make volatile and risky investment options more attractive for both retail and institutional investors.

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2025-01-07 21:36