- The crypto market witnessed a major sell-off during Asian hours, causing the global crypto market value to drop by up to 5% to $1.57 trillion.
- A popular Bitcoin analyst mentioned that the correction is not surprising, considering that the BTC price doubled in just two months.
- BTC price is expected to drop further due to the Bitcoin CME gap at $39.7K that needs to be filled before a potential rally.
Bitcoin and altcoins suffered a significant drop, leaving investors in shock: What factors are causing this decline?
Bitcoin and Altcoin Prices Plummeted
The crypto market experienced a substantial sell-off during Asian hours, causing the global crypto market value to drop by up to 5% to $1.57 trillion. While Bitcoin price fell by 7%, leading altcoins such as Ethereum (ETH), XRP, Solana (SOL), Cardano (ADA), DOGE, and SHIB recorded significant sales within a few minutes. The Crypto Fear and Greed Index dropped from 82 (extreme greed) to 80.
A correction in the crypto market was expected by traders as the market continued its rally. A popular Bitcoin analyst stated that the correction is not surprising, especially during periods of ‘extreme greed’ and major macro events, as corrections and pullbacks are crucial to confirm further rallies.
COINOTAG issued the first warning this week about the possibility of an upcoming correction. BTC price is expected to drop further due to the Bitcoin CME gap at $39.7K that needs to be filled before a potential rally. Open positions were liquidated by up to 5% on CME and 8% on Binance, respectively.
Additionally, CoinGlass data shows over $400 million in significant liquidations on December 12th. The market wiped out longs worth $354 in just one hour. In the last 24 hours, more than 119,000 traders were liquidated, with the largest single liquidation order being $8.23 million on OKX’s BTC-USDT-SWAP. Due to position closures and selling pressure, the crypto market is in the ‘red’ today.
Inflation data released this week and the announcement of the year-end interest rate decision by the U.S. Federal Reserve prompted investors to liquidate their assets.
Bitcoin and Ethereum Prices Expected to Drop Further
Bitcoin and Ethereum prices are expected to experience further retracement in the U.S. hours, and traders and whales are anticipated to consider another entry near support levels. A popular crypto analyst said, “We couldn’t break above 40,000.” He believes that a full reset in open interest (OI) does not disrupt the bullish market structure and is preparing for a rally towards $50,000.
He believes that the BTC price could reach $60,000 in the coming weeks. Meanwhile, he still expects the ETH price to reach $3,500. The BTC price is currently trading at $42,080, erasing gains from a few hours ago. The 24-hour lows and highs are $40,521 and $44,034, respectively. The ETH price is trading at $2,234 and experienced a 5% drop in the last 24 hours. The 24-hour lows and highs are $2,171 and $2,376, respectively.
