Bitcoin Price Declines, Triggering $420 Million in Crypto Liquidations
The price of Bitcoin #BTC has decreased by 2.99%, trading at $104,027.71, resulting in liquidations for 165,326 traders and a total liquidation exceeding $420 million. Data from CoinGlass indicates that the largest single liquidation occurred on the Binance exchange.
Long Traders Take the Hit in Crypto Liquidation
Despite Bitcoin's drop, the largest liquidation was not from Bitcoin itself but other cryptocurrencies. In the past 24 hours, $76.7 million was liquidated from Bitcoin, while $100.98 million was liquidated from other cryptocurrencies. Of the total liquidated Bitcoin, $54.1 million came from long traders who overestimated their positions following a recent price surge. After reaching $108,000, Bitcoin's price cooled off, leading to additional liquidations of over $22 million for traders betting on a downward trend.
Other significant liquidations included Ethereum #ETH with $55.54 million, Dogecoin #DOGE at $13.16 million, and XRP at $21.91 million. A few days prior, when Bitcoin peaked at $106,000, total liquidations reached $320 million within 24 hours, with approximately $8 million erased from the market in just one hour. During that period, short traders faced more losses, while long traders experienced minimal impact.
At that time, BTC accounted for $120 million of total liquidations—$104 million from short positions and nearly $16 million from long traders. The market typically faces liquidation each time Bitcoin registers a new all-time high (ATH).
What Happened to Bitcoin Price?
Analysts are exploring factors contributing to Bitcoin's price dip, including the impending interest rate decision from the United States Federal Reserve. Expectations suggest a baseline rate cut of 25 basis points, with uncertainty regarding the Fed’s potential pivot affecting market sentiment.
Mark Cuban anticipates a 25 basis point rate cut due to concerns about prolonged restrictive monetary policy. As the new year approaches, there is speculation that the Fed may implement three interest rate cuts. Currently, traders are hesitant to make investment decisions. Arthur Hayes, former CEO of BitMEX, predicts significant volatility in the Bitcoin and crypto markets around Donald Trump’s inauguration on January 20, 2025.
After falling below $104,000, Bitcoin has rebounded and aims to reclaim the $105,000 mark.