- Bitcoin’s Volatility: The swift and substantial decline in Bitcoin’s value, along with the subsequent impact on other cryptocurrencies, underscores the persistent volatility inherent in the digital asset markets.
- Market Expectations and Influences: The anticipation surrounding SEC decisions on Bitcoin ETFs and speculations about the Federal Reserve’s future actions continue to shape investor sentiments, contributing to the fluctuations in cryptocurrency values.
Cryptocurrency markets faced a sudden jolt as Bitcoin plummeted by 6.5% early on December 11, breaching the $41,000 mark in a rapid 20-minute downturn. This abrupt shift erased nearly five days of steady gains, causing ripples across the broader digital asset landscape.
The notable descent occurred precisely at 2:15 am UTC when Bitcoin swiftly nosedived from $43,357 to a low of $40,659. Despite a slight recovery, the leading cryptocurrency lingered at $41,960 at the time of reporting, based on TradingView data.
Cryptocurrency Market Turbulence: Bitcoin’s Rapid Plunge
Ether, standing as the second-largest cryptocurrency by market capitalization, mirrored the downtrend, experiencing an abrupt 8.9% drop within the same timeframe. As of now, ETH has stabilized at $2,233, marking a 5.3% decrease for the day.
The impact of this market upheaval extended beyond Bitcoin and Ether, affecting other major crypto assets such as BNB, XRP, and Solana, which also recorded losses during this period.
CoinGlass data revealed that the sudden plunge triggered liquidations surpassing $270 million from long positions. Furthermore, this downturn resulted in approximately $1.2 billion of open interest on BTC being wiped out, leaving the current figure around $17.9 billion.
The surprising dip came shortly after a comment by Scott Melker from Wolf of All Street, who had just noted Bitcoin’s closure with eight consecutive green weekly candles, playfully questioning the potential for a correction.
#Bitcoin just closed it's 8th green weekly candle in a row.
This week's candle was a monster.
When correction, sir? pic.twitter.com/xxWjTxxLLr
— The Wolf Of All Streets (@scottmelker) December 11, 2023
This notable drawdown represents the most substantial single-day decline for Bitcoin in over a month, despite the asset’s growth of more than 12% over the preceding 30 days. However, the broader context indicates a robust upward trajectory for Bitcoin, which has surged by over 150% since the start of the year.
Market Speculations and Influences on Bitcoin’s Trajectory
Much of this bullish momentum has been fueled by mounting expectations surrounding the possible approval of various spot Bitcoin exchange-traded funds (ETFs) by the United States Securities and Exchange Commission (SEC). These anticipated approvals could enable significant institutional exposure to the asset for the first time.
Additionally, market sentiments have been buoyed by speculations that the U.S. Federal Reserve might commence interest rate cuts by mid-2024.
As investors brace themselves for forthcoming inflation data and the final 2023 Federal Open Market Committee meeting, prevailing projections suggest improvements in core inflation figures. Most analysts are betting on the Fed maintaining current interest rates amid these developments.
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