The night of December 9–10 witnessed one of the most significant crashes in the cryptocurrency market in recent years. In just 24 hours, liquidations amounted to $1.7 billion, affecting over 560,000 traders. The primary victims were participants using high leverage, even at 5x. This event is already being called the "crypto carnage." What caused the crash, and what lies ahead?

Causes of the Crash: Expert Insights

Experts attribute the crash to several key factors:

1. Macroeconomic Instability.

Analyst Jamie Coates highlights that the global money supply (M2) is stabilizing, while the U.S. Dollar Index (DXY) shows signs of false volatility. Combined with excessively tight financial conditions, this creates uncertainty for markets.

2. Large Investor Sell-offs.

Since November 8, long-term Bitcoin holders have reduced their positions by 827,783 BTC (equivalent to $81.2 billion), intensifying market pressure.

3. Quantum Computing Concerns.

Google’s announcement of the Willow chip sparked fears about the security of cryptographic algorithms, triggering a wave of panic.

4. Bhutan’s Government Asset Sales.

The sale of 406 Bitcoins ($40 million) by Bhutan’s government further pressured prices.

5. Pre-Halving Historical Corrections.

Bitcoin often experiences periods of decline and accumulation before its halving events.

What Happened in the Market?

Bitcoin's price plummeted to $90,500, Ethereum (ETH) dropped to $3,465, and Solana (SOL) traded around $200. Some altcoins lost over 30% of their value in just 24 hours.

Mass liquidations of leveraged positions triggered a chain reaction that deepened the crash.

Traders using 10x leverage were the hardest hit, but even those considering 5x leverage as "safe" faced widespread liquidations. According to trader "ltrd," these are the largest liquidations since 2021.

Forecast: What’s Next?

The short-term outlook for the crypto market remains uncertain. Analysts at CryptoQuant believe it is unlikely for Bitcoin to surpass $100,000, as speculative interest on exchanges is waning.

However, Jamie Coates suggests Bitcoin could recover and resume growth within the next 2–3 months. Historical data indicates that pre-halving periods often see asset accumulation. Additionally, demand for cryptocurrencies remains robust due to the popularity of decentralized finance (DeFi) and NFTs.

The recent events serve as a reminder of the importance of:

• Analyzing Macroeconomic Factors. Successful traders take global economic indicators into account.

• Risk Management. Using high leverage significantly increases the risk of liquidation.

• Staying Informed. Announcements from major tech companies or government actions can have abrupt market impacts.

Following such crashes, the market often experiences short-term rebounds as participants attempt to buy assets at lower prices. However, sustained growth requires improvements in global liquidity.