The cryptocurrency market has seen a sharp decline over the past 24 hours, with Bitcoin falling to $94,100 before recovering to $97,800. The 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 made up $136.7 million.
Bitcoin liquidations totaled $163.4 million, with Ethereum accounting for $204.7 million. The broader market saw its capitalization shrink by 7.5%, reflecting significant losses across major cryptocurrencies. Ethereum dropped 8% below $3,800, while Ripple, Dogecoin, and Cardano suffered heavy declines of 11%, 10%, and 13%, respectively.
The downturn comes shortly after Bitcoin hit an all-time high of $103,679 on Dec. 4, a milestone attributed to a weeks-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 wipeout on Dec. 5, marking the largest liquidation event since December 2021. The market has faced increased volatility as large holders adjusted positions in response to fluctuating prices.
While the exact cause of the sell-off remains uncertain, traders have pointed to several potential triggers. These include Bitcoin transfers originating 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 have seen significant losses, dropping by double-digit percentages in the past day. The crash wiped out $1.7 billion in leveraged positions across the market, reflecting the intense sell-off.
Monday’s developments come during a turbulent period for cryptocurrencies. The rapid fluctuations in price and large-scale liquidations highlight the ongoing risks associated with trading highly leveraged positions. Bitcoin’s rebound has provided some relief, but traders remain cautious amid a challenging market environment.
