$250 Million Liquidated: Bitcoin and XRP Lead Bear Massacre

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In December, the U.S. reported a higher-than-anticipated Consumer Price Index (CPI), revealing a 0.4% increase following seasonal adjustments, contrary to the predicted 0.3%. This marks the third straight monthly rise and pushes the annual CPI rate up to 2.9%, which is the highest it’s been since July 2024.

In response to the recent news, both traditional and digital markets showed optimism, resulting in an impressive spike for Bitcoin. In just a few short minutes, the price of Bitcoin surged more than 2%.

In a similar vein, other well-known cryptocurrencies like XRP displayed extraordinary fluctuations, surging by 3.5% within just one minute. To put this into perspective, we’re dealing with a massive financial asset here, and such rapid price changes don’t amount to millions, but billions of dollars. This is similar to an earthquake in terms of its far-reaching impact.

For a particular set of investors, known as ‘sellers’ or ‘bears’, it felt quite similar to their usual circumstances.

Bears crushed: What’s next?

According to information from CoinGlass, since the release of the CPI, a staggering $87.23 million worth of short positions have been closed out – this figure is three times greater than the amount of long positions. In just one day, the liquidation of these short positions reached an impressive $250 million, equivalent to a massive quarter of a billion dollars.

What is 63% of that? Shorts, and most of them were liquidated after the CPI.

Among the leading digital currency assets known for significant price surges are typically Bitcoin and Ethereum, but this time it’s XRP that has joined their ranks. As the third-largest cryptocurrency, XRP soared to reach approximately $2.90, generating a massive short liquidation of around $14 million on its own. To give you an idea of the scale, Bitcoin and Ethereum generated about $39 million and $28 million in short liquidations respectively.

It’s uncertain where the market will head next, as all significant January events related to monetary policy have already occurred. In five days, Gary Gensler, the present SEC chair, is expected to resign, and there will be a shift in the U.S. administration.

These advancements might bring about fresh elements that could influence digital currencies such as Bitcoin, Ethereum, and Ripple, causing uncertainty among investors about which direction – bullish or bearish – will prevail in the near future.

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2025-01-16 17:47