The cryptocurrency market shed a lot of blood in the past 24 hours, as the price of Bitcoin dropped to $94,100 from the high of the day and recovered to $97,800. Data from Coinglass revealed that the decline led to $1.5 billion in liquidations, taking out around 514,400 traders.
Losing the most was long positions that amounted $1.38 billionutorial liquidations, and short amounted $136.7 million. Overall, Bitcoin liquidations were at $163.4 million, while Ethereum came in at $204.7 million.
It had been a bad week for the market as the total capitalization shrank 7.5 per cent as major cryptocurrencies tumbled. Despite the decline, both Ethereum and Ripple fell 8% below $3,800 and 11% below $1.07 respectively, while Dogecoin and Cardano lost 10% and 13%, respectively.
Bitcoin’s Struggle After Historic High of $103,679
Merchants haven’t been jumping on board in recent weeks, leaving Bitcoin down from its historic high of $103,679 on December 4, which marked Bitcoin’s last weeks-long rally that coincided with president elect Donald Trump’s election. Despite a first time crossing the $100,000 barrier, Bitcoin still has a hard time with the momentum.
That sell off comes after an already turbulent market, including a $1.1 billion leverage blowup last month that was the largest liquidation event since December 2021. Analysts say the volatility spike is partly a function of big holders unwinding positions as prices fluctuate.
Traders remain speculative about the cause of the crash, however, citing large Bitcoin transfers from Bhutan and the release of Google’s latest quantum computing chip, ‘Willow.’ Immediately, experts don’t see catastrophic risks from the quantum computing breakthrough, but the quantum computing breakthrough has once again triggered concerns about the security of blockchain.
Bitcoin bounced back to $97,800 after tumbling to as low as $89,600 in choppy trade, but altcoins remain on the downturn with double digit percentage losses across the board. The risk of highly leveraged trading has been shown by the market sell-off: $1.7 billion in leveraged positions have been erased.
The cryptocurrency sector faces a challenging period of developments Monday. This is some relief, however Bitcoin’s volatile price and extreme liquidations are making many traders feel uneasy in what is an uncertain environment.
