Bitcoin Experiences Sudden Drop and Recovery Amidst Major Liquidations

On Thursday, Bitcoin, the largest cryptocurrency in the world, saw an unexpected decline, falling to its lowest point in over a week. This drop prompted liquidations in digital assets exceeding $1 billion within minutes before the market experienced a sharp rebound.

At around 5:26 PM ET, the price of Bitcoin fell by 6.3%, reaching a low of $92,000 in just three minutes. However, the situation quickly changed, and Bitcoin recovered to above $97,600, dipping slightly again by about 1%. According to Coinbase, despite a decline of 1.7% during the day, bringing the price to $97,100, Bitcoin has still gained over 39% in value over the past month, largely fueled by bullish sentiment regarding President-elect Donald Trump.

This dramatic price movement triggered over $1.07 billion in liquidations across the crypto market, with approximately 80% of these liquidations—around $817 million—originating from long positions, as reported by CoinGlass. Furthermore, long liquidations for Bitcoin alone surged past $390 million in just four hours.

Analysts advise caution, suggesting that traders should remain aware of potential profit-taking as asset prices don’t continue to rise indefinitely. The volatility followed a remarkable spike late Wednesday when Bitcoin briefly surged past the significant $100,000 threshold, setting record highs above $103,000.

This recent increase in Bitcoin’s value is closely tied to Trump’s reelection prospects, which include supportive rhetoric concerning cryptocurrency and pledges aimed at strengthening the industry. On Thursday, Trump took credit for Bitcoin surpassing $100,000, coinciding with his recent choice for the next Chairman of the Securities and Exchange Commission (SEC).

Trump nominated Paul Atkins, a former SEC commissioner, to head the regulatory agency starting next year. Atkins is viewed as a more favorable figure for the crypto community compared to the current Chairman, Gary Gensler.

Bitcoin, Liquidations, Crypto