Bitcoin once fell below 96,000, with over 300,000 people liquidated.
After Bitcoin surged to $108,000 and then corrected, it briefly fell below $96,000 as of this morning (12/20), currently recovering slightly above $97,000.
Other cryptocurrencies performed even more poorly, with Ethereum ($ETH) briefly falling below $3,500, while coins like Cardano ($ADA), Chainlink ($LINK), and Aptos (APT) saw declines of 15%-20%.
CoinGlass data shows that over the past 24 hours, more than 300,000 people have been liquidated in the cryptocurrency market, with the total liquidation amount reaching $1.03 billion. Among them, the liquidation amount for long positions (buy orders) exceeded $800 million, resulting in significant losses, with the largest single liquidation order occurring on Binance, where someone's ETH/USDT order was liquidated for $15.8 million.
Source: CoinGlass 12/20 cryptocurrency perpetual contract market liquidation data.
Why is Bitcoin falling? The Fed's hawkish tone for 2025 severely impacts the market.
Foreign media (CoinDesk) pointed out that this decline was mainly influenced by the hawkish remarks of Federal Reserve Chairman Jerome Powell.
The Fed's latest dot plot predicts only two rate cuts in 2025, far below market expectations, disappointing investors. LMAX Group market strategist Joel Kruger stated that the market has been in a tense state since Bitcoin fell below $100,000, and this impact from the traditional market is too significant to ignore.
In the traditional market, the U.S. dollar index (DXY) broke 108, hitting a new high since November 2022, and the yield on 10-year U.S. Treasuries surged above 4.6%, reaching its highest level since May, all of which put pressure on the cryptocurrency market.
Will Bitcoin fall further? Analysts predict a look.
Although Bitcoin has entered a corrective fluctuation in the short term, market participants and analysts do not believe the bull market has ended.
Azeem Khan, co-founder of Morph, stated that such a pullback is healthy considering Bitcoin's annual increase. Historical trends show that sell-offs often occur at year-end as investors use losses to offset profits to reduce tax burdens.
Glassnode's analysis indicates that since Bitcoin first entered a bull market in 2012, there has been a tendency for the pullback magnitude of each bull market cycle to decrease.
Largest pullback magnitude of the bull market cycle: 32% in 2024, 63% in 2021, 36% in 2017, 71% in 2013, 49% in 2011.
Source: Glassnode Bitcoin bull market cycle maximum pullback magnitude chart.
Glassnode believes that the variation in the pullback magnitude of Bitcoin's bull market cycle may reflect significant demand brought by spot ETFs and increased interest from institutional investors.
Rafael Schultze-Kraft, founder of Glassnode, further pointed out that based on the distribution of Bitcoin's cost basis, $97,000 to $99,000 is an important short-term support area. Bitcoin researcher Axel Adler also agrees with this view, noting that $97,900 is an important recent support level.
From a medium to long-term perspective, Bitcoin's bull market structure remains intact. Technical analysis shows that there is a price gap (FVG) and a 50-day moving average support between $95,000 and $97,500.
However, if the daily closing price falls below $95,000, Bitcoin may further decline to the key liquidity area of $90,000. Currently, most traders are focused on Bitcoin's performance between $95,000 and $100,000.
【Disclaimer】The market carries risks, and investments should be made with caution. This article does not constitute investment advice, and users should consider whether any opinions, viewpoints, or conclusions in this article align with their specific circumstances. Invest at your own risk.
‘300,000 people liquidated, $1 billion evaporated! Bitcoin drops below 96,000, why has it been falling for the past two days?’ This article was first published on ‘Crypto City’
