Bitcoin price drop below $95,000 triggered a wave of liquidations, leaving traders reeling from nearly $300 million in losses.
The cryptocurrency market has been in free fall over the past week, with Bitcoin BTC $94 031 24h volatility: 0.9% Market cap: $1.87 T Vol. 24h: $25.93 B plunging below $95,000, marking a nearly 10% decline in just seven days. This sharp drop has triggered substantial losses for altcoin and futures traders, with long positions bearing the brunt of the impact.
On Monday, December 23, leveraged positions worth nearly $300 million were liquidated as Bitcoin price slump accelerated. Most of these liquidations involved long traders who had expected Bitcoin to rally above its current level of $94,951. This marks Bitcoin’s lowest point since mid-November when optimism fueled by Donald Trump’s election victory briefly drove prices higher.
Traders Face Heavy Losses amid Market Chaos
According to data from CoinGlass, traders collectively lost $294.66 million, with $194 million attributed to long traders and $99 million to short sellers. Bitcoin contributed significantly to the liquidations, accounting for approximately $64 million in losses, with long traders alone losing $43 million. Ethereum ETH $1 767 24h volatility: 2.8% Market cap: $213.32 B Vol. 24h: $13.08 B traders also faced significant challenges, incurring losses of $60 million.
The market turmoil affected 105,495 traders globally, with one Binance trader losing $4.76 million in a single Bitcoin trade. Other major platforms, including Bybit, OKX, and HTX, also recorded significant liquidations, highlighting the widespread impact of the downturn.
Market analysts believe the Federal Reserve’s tighter monetary policy played a major role in the market sell-off. While the Fed’s decision to adjust borrowing rates was expected, its move to reduce the number of rate cuts it plans for 2025 – from four to just two – suggested a more aggressive approach. This shift has made investors more nervous and contributed to the market downturn.
Additionally, Federal Reserve Chairman Jerome Powell clarified that the agency has no intention of supporting a proposed government Bitcoin reserve strategy. Powell also emphasized that the Fed is prohibited from owning Bitcoin under current laws, stating:
“We are not allowed to own Bitcoin, and we’re not looking for a law change.”
Expert Opinions Highlight Critical Levels
Markus Thielen, head of research at 10x Research, weighed in on the situation, describing Bitcoin’s $95,000 price level as a crucial point for risk management. He explained on X (formerly Twitter):
“Bitcoin has returned to the critical $95,000 support level highlighted in our December 9 report, ‘Is Bitcoin Entering the Death Zone?’ This level is now a key focal point for risk management, especially in light of the Fed’s hawkish pivot and the potential liquidity-impacting moves expected from the US Treasury Secretary in 2025. Other market factors are also becoming less supportive, adding to the challenges.”
The cryptocurrency market suffered heavy significant losses as Bitcoin fell below $95,000, wiping nearly 10% of its value in a week. Leveraged positions worth $294.66 million were wiped out, with long traders accounting for $194 million of the losses. The market crash affected 105,495 traders, including a Binance user who lost $4.76 million in a single trade.
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