A whopping $400m has now been liquidated form the crypto market following Bitcoin’s drawdown to $96.3K on Tuesday, respectively.
Bitcoin recently experienced a notable surge, briefly surpassing the $100,000 threshold on Monday after a significant 3.94% increase.
However, this upward momentum was short-lived, as the cryptocurrency faced a sharp decline on Tuesday, dropping below a $2 trillion market valuation.
The digital asset reached a daily low of $97,153, and as of now, Bitcoin is trading at approximately $97,785.84, reflecting a decrease of 4.27%.
Current Market Overview
Data from CoinMarketCap indicates that Bitcoin’s market capitalization sits at $1.93 trillion, with a dominance of 56.4% in the overall cryptocurrency market.
After peaking at $102,000 earlier on Tuesday, Bitcoin encountered significant resistance, leading to its current downturn.
Analysts predict that if Bitcoin can rebound from its minor support levels between $96,000 and $97,000, it may attempt further tests of the $100,000 to $102,000 price range.
In a concerning development, Coinglass reports that approximately $381.56 million in cryptocurrency positions were liquidated in the last 24 hours.
This includes $331.20 million in long positions and $50.36 million in short positions.
Notably, over $240 million was liquidated in just the past four hours, with $216.87 million in long positions and $23.12 million in shorts being wiped out.
Market Sentiment: Fear and Greed Index
Despite the recent downturn, the Crypto Market Fear and Greed Index remains in bullish territory, indicating that many investors are seizing the opportunity to buy the dip and accumulate more digital assets.
The Index, which measured a neutral value of 48 last week, has surged to 66, reflecting a sentiment of greed and optimism among traders.
Factors Influencing Bitcoin’s Price Movements
Previously, Bitcoin was on track to reach $112,000, driven by rising investor demand and significant inflows into U.S. spot Bitcoin exchange-traded funds (ETFs), which accounted for an impressive $987.06 million on January 6, according to SoSoValue data.
This bullish sentiment has been further fueled by the anticipation surrounding the inauguration of president-elect Donald Trump on January 20.
However, Bitcoin’s ascension faced turbulence following the U.S. Bureau of Labor Statistics’ report indicating that job openings surged by 259,000 to a total of 8.09 million in November 2024.
This robust labor market data implies that the Federal Reserve may be less inclined to implement rate cuts in 2025, as overall economic conditions appear to be improving.
Additionally, the ISM Services Purchasing Managers’ Index (PMI), which serves as a monthly gauge of U.S. business activity, exceeded expectations.
This positive economic outlook could further diminish the likelihood of rate cuts, which are generally seen as favorable for Bitcoin, as they enhance the appeal of high-risk investments for both retail and institutional investors.
As Bitcoin continues to navigate this volatile landscape, investors are advised to stay informed and vigilant.
The cryptocurrency’s current price fluctuations highlight the importance of market dynamics and investor sentiment in shaping its trajectory.
While the road ahead may be uncertain, ongoing developments in both the crypto market and the broader economy will play a critical role in determining Bitcoin’s future performance.
Read Daily Market News for more crypto industry updates and developments.
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Also Read: IRS Now Delays Crypto Tax Reporting Requirements Until 2026
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