The cryptocurrency market faced a significant jolt as over $1 billion in leveraged positions were liquidated within 24 hours on December 19, according to data from CoinGlass.
Major Liquidations Hit Long Positions
The bulk of the liquidations—approximately $856.66 million—came from long positions, underscoring the vulnerability of bullish traders caught off guard by the unexpected market dip.
Bitcoin, which had been riding high on a 30-day bullish momentum, dropped below the critical $100,000 psychological level following the Federal Reserve’s hawkish stance.
Bitcoin Falls to Local Low of $93,000
On December 5, Bitcoin’s price plunged 5.47%, dropping below $93,000 and triggering $300 million in liquidations within minutes.
An even larger liquidation event occurred on December 10, with over $1.7 billion wiped out in 24 hours.
Currently, Bitcoin is trading at around $97,000, down by more than 4% over the past day, according to CoinMarketCap.
Crypto veteran and Bitcoin maximalist Fred Krueger commented on X (formerly Twitter), stating:
“The only way to screw up trading Bitcoin is through leverage,” highlighting the risks of high-leverage trading in volatile markets.
Analysts Remain Optimistic Despite Market Dip
While the recent downturn rattled traders, some analysts view it as a temporary correction typical of bull markets.
Caleb Franzen, a prominent crypto market analyst, noted that during the previous bull run, Bitcoin experienced nine notable pullbacks, each followed by a new all-time high.
Jamie Coutts, chief crypto analyst at Real Vision, suggested that the dip might present a buying opportunity, with hopes of a potential “Santa rally”—a year-end seasonal surge in asset prices.
Fed’s Hawkish Stance Adds Pressure
The market dip coincided with the Federal Reserve’s December 18 announcement of a quarter-percentage-point rate cut, marking the third consecutive reduction.
While lower interest rates typically benefit risk assets like Bitcoin, the Fed’s cautionary tone about additional cuts in 2025 weighed heavily on the market.
The Fed signaled only two more rate cuts in 2025, curbing optimism.
Ruslan Lienkha, Chief of Markets at YouHodler, commented:
“Cryptocurrencies remain too volatile to serve as effective hedges in developed economies. However, they are increasingly viewed as long-term hedges against inflation.”
Geopolitical and Regulatory Speculation
Market sentiment is also influenced by speculation surrounding the upcoming inauguration of Donald Trump as the 47th U.S. president in January 2025.
Analysts are closely monitoring how the new administration might address crypto regulation.
Discussions of a potential U.S. Bitcoin strategic reserve could further impact the market.
What Lies Ahead for the Crypto Market?
The combination of Federal Reserve policies, geopolitical factors, and seasonal trends will likely shape the crypto market’s trajectory in the coming weeks.
Stay updated with the latest cryptocurrency news and insights at CentBit.Online—your trusted source for Crypto & Blockchain Expertise in Bangladesh.
(SEO Optimized by CentBit.Online – Empowering Blockchain Innovations)
The cryptocurrency market faced a significant jolt as over $1 billion in leveraged positions were liquidated within 24 hours on December 19, according to data from CoinGlass.
Major Liquidations Hit Long Positions
The bulk of the liquidations—approximately $856.66 million—came from long positions, underscoring the vulnerability of bullish traders caught off guard by the unexpected market dip.
Bitcoin, which had been riding high on a 30-day bullish momentum, dropped below the critical $100,000 psychological level following the Federal Reserve’s hawkish stance.
Bitcoin Falls to Local Low of $93,000
On December 5, Bitcoin’s price plunged 5.47%, dropping below $93,000 and triggering $300 million in liquidations within minutes.
An even larger liquidation event occurred on December 10, with over $1.7 billion wiped out in 24 hours.
Currently, Bitcoin is trading at around $97,000, down by more than 4% over the past day, according to CoinMarketCap.
Crypto veteran and Bitcoin maximalist Fred Krueger commented on X (formerly Twitter), stating:
“The only way to screw up trading Bitcoin is through leverage,” highlighting the risks of high-leverage trading in volatile markets.
Analysts Remain Optimistic Despite Market Dip
While the recent downturn rattled traders, some analysts view it as a temporary correction typical of bull markets.
- Caleb Franzen, a prominent crypto market analyst, noted that during the previous bull run, Bitcoin experienced nine notable pullbacks, each followed by a new all-time high.
- Jamie Coutts, chief crypto analyst at Real Vision, suggested that the dip might present a buying opportunity, with hopes of a potential “Santa rally”—a year-end seasonal surge in asset prices.
Fed’s Hawkish Stance Adds Pressure
The market dip coincided with the Federal Reserve’s December 18 announcement of a quarter-percentage-point rate cut, marking the third consecutive reduction.
While lower interest rates typically benefit risk assets like Bitcoin, the Fed’s cautionary tone about additional cuts in 2025 weighed heavily on the market.
- The Fed signaled only two more rate cuts in 2025, curbing optimism.
- Ruslan Lienkha, Chief of Markets at YouHodler, commented:
“Cryptocurrencies remain too volatile to serve as effective hedges in developed economies. However, they are increasingly viewed as long-term hedges against inflation.”
Geopolitical and Regulatory Speculation
Market sentiment is also influenced by speculation surrounding the upcoming inauguration of Donald Trump as the 47th U.S. president in January 2025.
- Analysts are closely monitoring how the new administration might address crypto regulation.
- Discussions of a potential U.S. Bitcoin strategic reserve could further impact the market.
What Lies Ahead for the Crypto Market?
The combination of Federal Reserve policies, geopolitical factors, and seasonal trends will likely shape the crypto market’s trajectory in the coming weeks.
Stay updated with the latest cryptocurrency news and insights at CentBit.Online—your trusted source for Crypto & Blockchain Expertise in Bangladesh.
(SEO Optimized by CentBit.Online – Empowering Blockchain Innovations)
