In a surprising turn of events, Bitcoin’s price briefly flirted with the $100,000 mark for the first time on Thursday, only to experience a sharp 10% decline, nearly testing the support level just above $92,000. By Friday, December 6, during the early Asian trading session, Bitcoin was trading at approximately $97,680. This movement suggested that the previous day’s breakout above $100,000 was merely a temporary spike.
The abrupt selloff in Bitcoin over the past 24 hours led to the liquidation of more than $900 million across the entire cryptocurrency market, with long traders bearing the brunt of the impact. Bitcoin trading pairs were significantly affected, with approximately $498 million in liquidations, of which $421 million were from long trades.
Major Factors Behind the Sudden Bitcoin Crash
Leverage Trading Cool Down
In the past 24 hours, Bitcoin’s Open Interest (OI) skyrocketed to over $129 billion, coupled with a trading volume exceeding $466 billion. This surge indicated a strong demand from investors. Despite this, Tether issued $1 billion on Ethereum, but the Bitcoin price drop seemed inevitable due to the trading volume being relatively low compared to the buzz on social media. As a result, Bitcoin’s bull run required a cooldown to attract more buyers and gather momentum for a potential rally beyond the $100,000 mark.
Mixed Reactions Between Whale Investors and Retail Traders
The mystery behind Bitcoin’s rapid 10% price decline in just 43 seconds has been unraveled. Institutional players began offloading their holdings, while retail investors, driven by the fear of missing out (FOMO), continued to buy at the peak. For example, Meitu, a prominent Chinese institutional firm previously supportive of Bitcoin, disclosed that they had liquidated their entire holding of 948 BTC within the last day. Following this price drop, several whale investors seized the opportunity to acquire more Bitcoin, anticipating a renewed bull run in the near future.
Altcoin Takeover
With Bitcoin’s price retracting below the $100,000 threshold after the temporary spike, the altcoin market has gained significant bullish momentum. The TOTAL2 market capitalization, excluding Bitcoin, surged by over 3% in the past 24 hours, reaching approximately $1.57 trillion at the time of writing. Meanwhile, Bitcoin’s market dominance decreased by 1%, settling at around 55% on Friday, indicating a noticeable shift towards the altcoin sector. Moreover, Ethereum (ETH) has broken through a significant resistance level of around $3,800 and is on its way to reaching its all-time high.
