Bitcoin‘s value has dropped once more, returning to levels below six figures. On Wednesday morning in Asia, the digital currency reached its lowest point for the day at $95,164, a decline of nearly 6% over a 12-hour period, as reported by CoinGecko.
On January 7th (Tuesday), the value of the asset peaked at around $102,000 following a 10% increase over the preceding seven days. Yet, a significant portion of these recent gains has since been reversed.
Despite this, Bitcoin continues to stay within the confines of a channel that began taking shape in mid-December after it dropped from its record peak.
Liquidations Near $700M
Over the last day, I’ve seen around 235,000 fellow crypto traders face unwanted exits from their positions, resulting in a staggering $695 million in total liquidations. According to Coinglass, about 90% of these were long positions, with over $300 million being wiped out from both Bitcoin and Ethereum trades alone.
On Binance, the most significant individual liquidation event took place, involving a position in Ethereum (ETH) versus USD Tether (USDT), worth approximately $17.7 million.
The drop in stocks like Nvidia and Tesla led to a significant decline in the value of cryptocurrencies, according to derivatives provider Greeks Live. They also noted a shift in investor confidence, which has become more negative.
It’s been observed that the prevailing perspective might be influenced by a robust dollar and a drop in U.S. stocks, but this hasn’t altered the direction of Bitcoin – the bullish trend persists.
Others have suggested that the market nuke was due to hotter-than-expected jobs data in the US.
As an analyst, I believe the current market surge could be partially attributed to a higher-than-anticipated number of job openings. However, upon closer examination, it seems that the primary driver might be the recent increase in ISM prices paid, another key indicator that also recently reported positive figures.
Actual: 64.4
Estimated: 57.5
Prior: 58.2Has not been this high since Feb. 2023, making the market wonder if…
— Benjamin Cowen (@intocryptoverse) January 7, 2025
It was a “nasty reaction to the ISM PMI,” said CEHV partner Adam Cochran, who added:
This development caused investors to no longer anticipate a significant chance of interest rate reductions in the near future.
On January 8th, 10x Research emphasized that macroeconomic data plays a crucial role in forecasting changes in Bitcoin prices.
They pointed out that the increasing value of the U.S. dollar and the upward trend in U.S. bond interest rates are obvious signs of developing challenges for global liquidity and Bitcoin’s connection to it.”
Or more concisely:
“They noted that a stronger US dollar, along with rising US bond yields, are indicative of growing hurdles for global liquidity and Bitcoin’s linkage to it.
Altcoin Bloodbath
As I analyze the current market situation, it’s evident that the total capitalization has experienced a decline of approximately 7%, dropping to a value of $3.53 trillion at this very moment. The majority of these losses appear to have been shouldered by the altcoin sector, with an estimated $225 billion in value leaving this space.
Ethereum experienced a significant drop, plunging by approximately 8%, and dipping below $3,400. At the moment of writing, it’s holding steady there. This decline erased all the progress made by ETH over the last five days.
Once more, the crypto market is seeing a typical red wave, as popular altcoins like Dogecoin (DOGE), Avalanche (AVAX), Hyperliquid (HYPE), Pepe (PEPE), Near Protocol (NEAR), and Bittensor (TAO) are all experiencing significant drops of over ten percent.
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2025-01-08 10:31