Heavy Crypto Liquidations of About $1.8B Sets Stage for New Bitcoin (BTC) Rally Soon

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As a seasoned analyst with over two decades of experience in the financial markets, I have witnessed countless market fluctuations and trends, from the Dot-com bubble to the Global Financial Crisis. Today’s crypto market volatility brings back memories of those tumultuous times, albeit with a unique twist.

As a researcher, I’ve observed a significant surge in volatility within the cryptocurrency sector over the past 24 hours, with Bitcoin (BTC) dipping to approximately $94,725 – a decline from its previous value of $97,725. This dip has contributed to a broader market downturn, with the total crypto market capitalization falling by over 6% to around $3.6 trillion during the mid-London session on Tuesday, December 10. The 24-hour trading volume also saw a notable increase, reaching $148.77 billion.

As a result, the crypto market experienced its largest liquidation in recent history, totaling approximately $1.8 billion. Over $1.5 billion of these liquidations were from long traders. The biggest single liquidation order took place on the Binance exchange, involving around $20 million worth of ETH/USDT.

Major Reasons Why Crypto Liquidations Topped $1.8B Today

In the last 24 hours, there was widespread selling in the cryptocurrency market due to a flurry of unfavorable news. Notably, Google unveiled its cutting-edge quantum technology called Willow – a chip that’s capable of solving complex tasks within mere minutes, whereas today’s most powerful supercomputer would require 10 septillion years for the same task.

The announcement was a major shock to the Bitcoin community, sparking some discussions about the possible impact on Bitcoin’s SHA-256 security. Nevertheless, Charles Edwards, founder of Capriole Investment, pointed out that the quantum computing threat to Bitcoin may not materialize until around 5-10 years from now.

Consequently, Edwards emphasized the importance of incorporating network upgrades by Bitcoin’s main developers to fortify BTC against potential quantum attacks.

Edward pointed out that it’s great to see so much discussion about Quantum Computing today; maybe it will finally gain widespread recognition. To ensure a long-term appreciation of Bitcoin, he emphasized that we should actively engage in the field of Quantum Computing now.

In simpler terms, the crypto world felt a temporary wave of concern when it seemed that El Salvador and Bhutan might delay their Bitcoin initiatives. But things are looking up in the U.S., where they’re close to approving legislation for strategic Bitcoin reserves, which could inspire other countries like Russia to follow suit.

What’s Next?

After a series of high crypto liquidations recently, new investment might spark optimistic feelings in the market. Moreover, it’s worth noting that Bitcoin spot ETFs like IS have seen a significant inflow of approximately $479 million, with BlackRock’s IBIT and Fidelity’s FBTC leading the way.

Furthermore, Ether Exchange-Traded Funds (ETFs) saw a significant net cash influx totaling more than $149 million last week, boosting their overall cumulative net inflow to approximately $1.56 billion. To add to this, as Coinspeaker reports, digital asset investment products recorded the highest weekly cash influx of over 3.8 billion during the initial week of December, marking a substantial increase in investments.

Given that the amount of Bitcoin held on centralized exchanges is currently at its lowest in several years, roughly 2.25 million coins, it seems that an uptrend or bull market could be just around the corner in the short term.

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2024-12-10 13:33