As a seasoned analyst with over two decades of experience in the financial markets, I’ve seen my fair share of market volatility, and the recent crypto liquidation event was no exception. The sell-off on Dec 9th was reminiscent of the wild west, where the sheriff (in this case, Coinbase traders) triggered a chain reaction that sent prices plummeting.
On December 9th, a significant shake-up occurred within the digital currency market, as it collectively lost approximately $2 billion in cryptocurrency liquidations. To clarify this event and its implications, crypto analyst Ash Crypto on X provided an analysis of the factors that led to the most substantial sell-off since 2021.
Crypto liquidations started on Coinbase
Based on what experts are saying, the market sell-off initiated on Coinbase when traders started offloading their holdings approximately an hour prior to the significant decline. He pointed out that this selling wave set off a chain reaction similar to dominos falling one after another.
The Largest Liquidation Event Since 2021!
— Ash Crypto (@Ashcryptoreal) December 10, 2024
As the market reached a significant point where sell-offs could occur, he predicted that the situation was critical because stop-loss orders were being activated in rapid succession. The intensely active market witnessed an increase in transaction fees and a spike in Open Interest (OI) as traders seized new investment opportunities.
Following the recent market plunge, robust buying activity resurfaced for Ethereum. Traders viewed ETH as a secure investment due to its relatively smaller decline compared to Bitcoin. In contrast, the value of XRP dropped significantly by more than 12%, reaching a low of $2.06 during the widespread sell-off.
The analyst said XRP still has thin liquidity, thus impacting its spike potential. Amid the sell-off, Cardano (ADA), USDC and FDUSD recorded an insane boost in volume.
What now?
Currently, the market is bouncing back from an unforeseen dip. The value of Bitcoin was traded at approximately $97,658, showing a minor decrease of 0.68% over the past day. Notably, many altcoins like Solana (SOL) and Binance Coin (BNB) have also rebounded from their significant drops.
As stated by Ash Crypto, the process of liquidation presumably eliminated investors with less financial strength, creating an opportunity for more strategic investors to purchase the dip at a reduced price. Predictably, he anticipates that the value of the coin will rebound swiftly.
The market continues to have the essential foundations that facilitated its growth during the last several weeks. This week, MicroStrategy invested a substantial $2.1 billion in Bitcoin, demonstrating robust institutional involvement within the market.
Experts anticipate a quick bounce-back in the market, and Robert Kiyosaki encourages individuals to invest in Bitcoin at present.
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2024-12-10 14:35