The cryptocurrency market saw a sharp decline over the past 24 hours, with Bitcoin falling to $94,100 before rallying back to $97,800. This drop contributed to $1.5 billion in liquidations, affecting approximately 514,400 traders, according to Coinglass. Long positions accounted for $1.38 billion of the total liquidations, while short positions accounted for $136.7 million.
Bitcoin liquidations totaled $163.4 million, and Ethereum totaled $204.7 million. The market as a whole saw its capitalization decline by 7.5%, reflecting significant losses across major cryptocurrencies. Ethereum fell 8% below $3,800, while Ripple, Dogecoin, and Cardano suffered sharp declines of 11%, 10%, and 13%, respectively.
The slowdown comes shortly after Bitcoin hit an all-time high of $103,679 on December 4, a milestone attributed to a week-long rally following the election of Donald Trump as the 47th president of the United States. Bitcoin surpassed $100,000 for the first time during this rally, but has since struggled to maintain its gains.
The latest wave of liquidations follows a $1.1 billion leverage on Dec. 5, marking the largest liquidation event since December 2021. The market faced increased volatility as large holders adjusted their positions in response to price fluctuations.
Although the exact cause of the sell-off remains unclear, traders have highlighted several potential triggers. These include Bitcoin transfers from Bhutan and the release of Google’s “Willow” quantum computing chip, which has reignited discussions about the long-term implications of quantum technology on blockchain security. However, experts note that the immediate threat posed by quantum computing remains minimal.
Despite Bitcoin’s partial recovery to $97,800, the market continues to face pressure. Altcoins suffered significant losses, falling by double-digit percentages over the past day. The crash wiped out $1.7 billion in leveraged positions in the market, reflecting the intense selloff.
Monday’s developments come amid a turbulent period for cryptocurrencies. Rapid price swings and large-scale liquidations highlight the ongoing risks associated with trading highly leveraged positions. Bitcoin’s rebound has brought some relief, but traders remain cautious amid a challenging market environment.
