Bitcoin’s sub-$100k fall triggered $1.4b in liquidations

Crypto markets were under downward pressure on Friday (December 20), driven by Bitcoin’s fall below $100,000, a broad drop in spot prices and a funding surge.

Cryptocurrency market prices corrected shortly after the US Federal Reserve announced it would slow rate cuts to address inflationary concerns. After the interest rate of 25 basis points reductionBitcoin (BTC) fell below $97,000, taking the broader digital asset market with it, according to crypto.news price data pages.

According to CoinGlass, Bitcoin’s fall triggered a massive $1.4 billion liquidation, wiping out leveraged long positions within 24 hours. The largest liquidated transaction was a $15.8 million Ethereum (ETH) position on Binance. The identity of the trader and the initial investment remain unknown.

The toilet flush reset open interest and funding rates on major trading platforms such as CME, Binance and Bybit.

Major altcoins like Solana (GROUND) and Dogecoin (DOGE) were hit hard by the selling pressure, retracing gains from the “Trump victory” rally and posting double-digit losses in the weekly time frame.

Despite widespread criticism of the Fed, experts suggested the market slowdown was inevitable following the post-US election price surge. There have been calls for Bitcoin to consolidate between $85,000 and $95,000 as a healthier support range.

QCP Capital said on Telegram that hyper-bullish market sentiment ultimately triggered the correction. The total crypto market, which approached $4 trillion for the first time, fell to around $3.4 trillion at press time, down 7.6% over the past day.

While it’s easy to attribute this wave of selling to the Fed’s hawkish cuts, we believe the root cause of this morning’s crash is overly bullish market positioning. Since the election, risk assets have seen an impressive one-sided move, leaving the market extremely vulnerable to any shock.

QCP Capital