Crypto Liquidation Hits $1.1 Billion, Bitcoin, Ethereum, and XRP Nosedive

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As a seasoned analyst with over two decades of experience in financial markets, I have witnessed numerous market cycles and liquidations. The recent crypto market selloff is reminiscent of the dot-com bubble burst, where over-leveraged players learned the hard way about risk management.

Following a prolonged period of selling, the cryptocurrency market recently experienced one of its toughest liquidations this month. Bitcoin (BTC) was at the forefront of these losses. As per CoinGlass’s data, approximately 377 traders have endured significant losses in the market. The current state of the market highlights how heavily leveraged it is.

Bitcoin Leads Altcoins In Crypto Liquidation

Based on recent market statistics, the total value of assets sold off within a 24-hour period amounted to approximately $1.17 billion. Bitcoin saw a significant sale of $250.47 million, where long position holders faced losses totaling $191.82 million, while short position holders liquidated assets worth $58.65 million. Ethereum experienced a more moderate selloff at around $186 million; in this case, short position holders also incurred losses of about $22.02 million.

Simultaneously, a strong connection among crypto assets such as XRP, Solana, Dogecoin, and Cardano with Bitcoin led to widespread liquidations. Specifically, XRP experienced a loss of approximately $41.29 million, Solana shed around $38.38 million, Dogecoin lost about $59.32 million, and Cardano dropped an estimated $97.6 million.

As a researcher observing the cryptocurrency market, I’ve noticed an interesting development: Last week, Bitcoin reached an all-time high of $108,000. However, in the last 24 hours, its price has dipped by over 4.76%. This dip has narrowed Bitcoin’s trading range significantly, with prices peaking at approximately $102,748.15 and dropping as low as $95,587.68.

Currently, Ethereum has dropped by 9.47%, now trading at $3,363.43; XRP experienced a decrease of 6.36%, settling at $2.09; and Solana saw an 8.76% drop to reach $191.48. It’s unclear what specifically is causing the recent market downturn, but it appears that this trend started following the Federal Reserve’s 0.25% interest rate cut on December 18.

Following the announcement of the interest rate cut, Federal Reserve Chairman Jerome Powell expressed a pessimistic view on Bitcoin. When questioned about potential Bitcoin strategic reserve plans, Powell stated that the country has no intention of altering its laws in this regard. He further added that the Fed does not have the authority to hold Bitcoin as a reserve asset. This statement sparked a negative response from the broader market, contributing to the continued sell-off that ultimately resulted in the current crypto liquidations.

Where is the Market Heading?

On CoinGlass, it’s noted that the biggest cryptocurrency liquidation amounts to approximately $15.8 million and occurred on Binance Exchange. This comparatively small figure suggests that the crypto market is distributed widely among the majority of retail traders using leverage.

On the other hand, prominent market analyst Ali Martinez has highlighted an uncommon pattern among Bitcoin’s large-scale investors. These wealthy investors have amassed over a billion dollars worth of Bitcoin during the recent market downturn.

Whales bought over $1 billion worth of #Bitcoin $BTC during the recent market dip!

— Ali (@ali_charts) December 19, 2024

Recently, among the new purchasers is MARA Holdings, a Bitcoin mining corporation. As previously reported by Coingape, they bought 15,574 Bitcoins for approximately $1.53 billion. If this significant buying trend persists, it could potentially initiate a broader market rebound.

 

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2024-12-20 00:22