The Bitcoin price fell sharply as the cryptocurrency declined to an intraday low of $101,957 after reaching $105,424 during the day. This sharp downturn caused over $128 million worth of long positions to be liquidated in just four hours. 
Valuation Holding Up Despite the Big Decline
The general cryptocurrency market held a valuation of $3.5 trillion as of 8 p.m. ET, despite a 2.56% decline in the last 24 hours. Bitcoin, which had been hovering between $104,800 and $105,400, started to fall around 2 p.m. ET.
Rising Trading Volume in the Face of Selling Pressure
With a 1.7% loss against the U.S. dollar, the leading digital asset has a market cap of $2.04 trillion currently, with single coins priced at $102,052. The crypto has also observed a global trading volume of $21.80 billion in the past 24 hours. This increase in activity has often been attributed to some afternoon selling pressure that resulted in a moderate increase in market moves.
While this is certainly a drop, the trading volume is still considerable and speaks to the ongoing interest and activity around the cryptocurrency in the larger context of market dynamics.
Widespread Liquidations Across Crypto Markets
Overall, $371.94 million worth of liquidations occurred across crypto derivatives markets during this period, including $132 million worth of Bitcoin longs—with over $128 million occurring in just four hours. Open interest in Bitcoin futures markets is still high, with over $64 billion despite the sell-offs.
The Recovery of Tether Trading Volume
Out of the crypto economy’s entire trading volume of $83.94 billion, transactions involving Tether (USDT) accounted for $67 billion, cementing its claim to be the most-traded token of the day. As of Sunday, bitcoin controls 57.9% of the aggregate value of the crypto market, and ether commands 11.1%.
Investor Sentiment Signals a State of ‘Greed’
The Crypto Fear and Greed Index, which is maintained by Alternative.me, is at 71, suggesting a dominant mood of “greed.” Current moves in Bitcoin’s price underscore the persistent push and pull between perceived bullish optimism and market uncertainty as January approaches its end.
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This caution is emphasized by the prevalence of long liquidations and selling pressure; however, the ongoing high trading activity and open interest suggest general confidence in the market, which is also an important factor.
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Frequently Asked Questions FAQs
1. What caused the leading cryptocurrency to experience $132 million in liquidations?
The price of the largest cryptocurrency dropped 4% from $105K to $101K, causing massive long-position liquidations. This comes with $132M liquidated in 4 hours, showing how volatile the market remains.
2. What was the market’s reaction to the drop in price?
The crypto market liquidated $371 million across all assets, with $132 million of that from the biggest coin. Volumes to trade increased significantly, and open interest in futures markets remained well above $64B despite the sell-offs.
3. What does the Fear and Greed Index say?
The index came in at 71, suggesting a greedy market sentiment. That means overall sentiment remains supportive and positive, despite losses and huge volatility across the crypto markets.
4. What was the role of other tokens?
The largest stablecoin, Tether (USDT), had a trading volume of $67B, while the top cryptocurrency by market capitalization held a 57.9% market dominance, while Ethereum accounted for 11.1%. These figures underscore continued activity across the digital asset space.
