Bitcoin Drops Below $95,000 as Market Sees $294M in Liquidations
The cryptocurrency market has experienced a significant decline, with Bitcoin #BTC dropping below $95,000, reflecting a nearly 10% decrease over the past week. This downturn has resulted in substantial losses for altcoin and futures traders, particularly impacting long positions.
On December 23, leveraged positions valued at nearly $300 million were liquidated as Bitcoin's price fell. Most liquidations involved long traders who anticipated Bitcoin would rise above $94,951. This represents Bitcoin's lowest price since mid-November, when prices briefly increased due to optimism following Donald Trump's election victory.
Traders Face Heavy Losses amid Market Chaos
Data from CoinGlass indicates that traders incurred total losses of $294.66 million, with long traders losing $194 million and short sellers losing $99 million. Bitcoin contributed approximately $64 million in losses, with long traders alone facing $43 million in losses. Ethereum #ETH traders also reported significant losses totaling $60 million.
The market turmoil impacted 105,495 traders worldwide, including one Binance trader who lost $4.76 million on a single Bitcoin trade. Other platforms such as Bybit, OKX, and HTX also recorded considerable liquidations, underscoring the widespread effects of the downturn.
Market analysts attribute part of the sell-off to the Federal Reserve’s tighter monetary policy. The Fed's decision to limit planned rate cuts for 2025 from four to two has increased investor anxiety and contributed to the downturn.
Federal Reserve Chairman Jerome Powell clarified that the agency does not support a proposed government Bitcoin reserve strategy and emphasized that current laws prohibit the Fed from owning Bitcoin, stating:
“We are not allowed to own Bitcoin, and we’re not looking for a law change.”
Expert Opinions Highlight Critical Levels
Markus Thielen, head of research at 10x Research, noted that Bitcoin's $95,000 price level is critical for risk management. He stated on X (formerly Twitter):
“Bitcoin has returned to the critical $95,000 support level highlighted in our December 9 report, ‘Is Bitcoin Entering the Death Zone?’ This level is now a key focal point for risk management, especially in light of the Fed’s hawkish pivot and potential liquidity-impacting moves expected from the US Treasury Secretary in 2025. Other market factors are also becoming less supportive, adding to the challenges.”
The cryptocurrency market has faced significant losses as Bitcoin fell below $95,000, resulting in nearly 10% loss in value within a week. Liquidated leveraged positions totaled $294.66 million, primarily affecting long traders. The downturn impacted over 105,000 traders, including a notable loss of $4.76 million by a Binance user in one trade.