Crypto liquidations hit $1B as traders were ‘unprepared for bad news’

As a seasoned crypto investor with a decade-long journey in this rollercoaster ride, I’ve learned to anticipate and adapt to market fluctuations like a chameleon adapts to its surroundings. This recent downturn, while not ideal, is far from surprising considering the unprecedented bullish momentum we’ve witnessed over the past month.

Over the last day, more than a billion dollars worth of cryptocurrency was sold due to the unexpectedly robust surge in the market over the past month, taking investors by surprise.

However, the analyst suggests the market downturn may be short-lived.

Over the past month, I’ve noticed an overly optimistic outlook in the market. This bullish sentiment left little room for the absorption of negative news. Now, unexpected events have triggered a wave of indiscriminate selling.

‘Short-term angst,’ says analyst

Hundal stated that this wasn’t the ideal beginning we had envisioned for the Christmas stretch. However, it seems like a brief period of tension lies ahead.

Approximately $1.02 billion worth of cryptocurrencies were sold off in a 24-hour period on December 19th. Around $856.66 million of this amount was from investors holding long positions, as indicated by the data from CoinGlass.

For the identical duration, Bitcoin (BTC) dipped by approximately 3.36%, dropping once more under the significant $100,000 mark. At the point of this report’s release, Bitcoin is being transacted at around $97,350, as per information from CoinMarketCap.

It’s not the first occasion this month that Bitcoin dipping below $100,000 has led to a substantial loss for long position holders.

On December 5th, CryptoMoon announced that a quick drop of 5.47% in Bitcoin’s price below $93,000 caused a loss of approximately $300 million within minutes. More recently, on December 10th, a sudden downturn in the crypto market eliminated over $1.7 billion from leveraged positions throughout a 24-hour span.

CoinGlass said it was the biggest long liquidation of this cycle so far.

In response to the latest market events, Bitcoin advocate Fred Krueger commented in a December 19 post that one can potentially mismanage Bitcoin trading primarily by overusing leverage.

Nevertheless, Hundal maintains a positive outlook, believing that a “Santa rally” might yet occur, an event the market has been anticipating. On the other hand, Real Vision’s chief crypto analyst, Jamie Coutts, stated in a recent post on Dec 20th, hinting at a potential buying opportunity approaching.

As a crypto analyst, I find the market’s current volatility to be characteristic of a bull run phase – nothing to worry about here.

According to Franzen’s post on December 19th, there were nine instances when Bitcoin experienced a dip (or “pullback”) during the previous bull market spanning approximately 16 months. Interestingly, each of these dips was followed by new record highs.

“Buckle up, buttercup,” he added.

Market to price in Trump expectations

In essence, Hundal anticipates that from now on, the cryptocurrency market will factor in its predictions regarding the Trump administration’s influence.

On January 20, 2025, Donald Trump will be sworn in as the 47th president of the United States. Cryptocurrency enthusiasts are anxiously looking forward to learning about his proposed strategy for a U.S. Bitcoin reserve.

In other words, one part of the market will lose their wager as the new administration takes office and shows its direction, leading me to anticipate some market fluctuations when things become more transparent,” Hundal explained.

This piece serves as a source of general knowledge rather than offering legal or financial guidance. Please remember that any perspectives, ideas, or opinions shared in this article are solely those of the writer and may not align with the views held by CryptoMoon.

2024-12-20 06:42

‘Short-term angst,’ says analyst

Market to price in Trump expectations

Read More