Bitcoin Price Plummets 4% as $400 Million in Long Positions Liquidated

Cryptocurrency markets experienced a sharp downturn to start December. Bitcoin fell below $88,000 in early trading hours. The sudden drop triggered widespread investor panic.

Major altcoins like Ethereum mirrored the decline. The sell-off resulted in massive liquidations across the market.

Market Analysis Points to Weak ETF Inflows and Absent Dip Buyers

According to Bloomberg, Bitcoin slid as much as 4.3%. Ether dropped 6% to fall below the $2,900 mark. The liquidation of nearly $400 million in long positions intensified the sell-off.

This created a cascade of selling pressure. Investor sentiment turned sharply negative on social media platforms.

Sean McNulty, APAC derivatives trading lead at FalconX, spoke to Bloomberg. He described it as a “risk off start to December.” He cited meagre inflows into Bitcoin ETFs as a primary concern.

Broader Economic Factors and Federal Reserve Uncertainty

The crypto slump coincides with a key week for US economic data. Policymakers are closely watching for clues on future interest rate moves. This data could significantly influence market volatility.

Adding to the uncertainty, President Donald Trump announced a nominee for Federal Reserve chair. This selection is closely tied to desires for lower borrowing costs. The news contributed to a cautious mood in traditional markets.

Asian stocks wavered following the crypto crash. US equity futures also slipped slightly. The events highlight the interconnected nature of global financial markets.

The sudden Bitcoin price crash underscores the inherent volatility of digital assets. Market participants are now closely watching the $80,000 support level for Bitcoin. This event serves as a stark reminder of the risks in cryptocurrency investing.

Thought you’d like to know

What caused the Bitcoin price to drop?

The exact trigger is unclear. Analysts point to weak inflows into Bitcoin ETFs and a lack of buyers during the dip. Broader economic uncertainty also contributed to the sell-off.

How much did Ethereum fall?

Ethereum dropped by 6% in early trading. Its price fell below the $2,900 support level according to market data.

What was the total value liquidated?

Nearly $400 million in long positions were liquidated during the crash. This accelerated the downward price movement across major cryptocurrencies.

What is the next key level to watch for Bitcoin?

Market analysts are watching the $80,000 support level. A break below this point could signal further declines for Bitcoin’s price.

How did traditional markets react?

US stock futures edged lower amid the crypto volatility. Asian markets also showed hesitancy following their strongest weekly performance in nearly two months.