Thomas Daniels
Bitcoin Falls Below $100,000 Amid Severe Market Pressure
On Friday, December 20, cryptocurrency markets faced severe downward pressure as Bitcoin plunged below the $100,000 threshold. According to CoinGlass data, this steep decline, fueled by a widespread spot price selloff and a financing reset, wiped out $1.4 billion in leveraged positions across the digital asset market.
Federal Reserve Announcement Triggers Selloff
The U.S. Federal Reserve’s announcement of a 25-basis-point interest rate cut—indicating a pause in further reductions due to inflation concerns—set the selloff in motion. Bitcoin’s price subsequently fell below $97,000, marking its steepest single-day decline in recent weeks. The downturn also erased much of the post-election gains in major altcoins like Dogecoin and Solana.
$1.4 Billion Liquidation Event Rocks the Market
Bitcoin’s sharp decline triggered a $1.4 billion liquidation spree, with long positions bearing the brunt of the losses. The largest single liquidation involved a $15.8 million Ethereum position on Binance, though the trader’s identity and initial stake remain unknown.
This wave of liquidations reset open interest and funding rates across major trading platforms, including the CME, Binance, and Bybit. Analysts interpret this flush as a sign of shifting market sentiment, which had become excessively bullish ahead of the Federal Reserve’s announcement.
Experts Advocate for Bitcoin Consolidation
Despite the market turmoil, analysts suggest Bitcoin’s decline may foster healthier price consolidation. Experts, including those at QCP Capital, recommend a sustainable support range between $85,000 and $95,000.
“The market’s overly bullish positioning is the true issue, even though it’s easy to blame the selloff on the Fed’s hawkish cut,” QCP Capital noted on Telegram. “Risk assets have had a lopsided run since the election, making the market vulnerable to shocks.”
Altcoins Suffer Double-Digit Losses
The selloff’s effects extended beyond Bitcoin, with significant cryptocurrencies like Dogecoin and Solana posting double-digit losses over the past week. These declines wiped out gains attributed to the so-called “Trump win” rally. The overall cryptocurrency market capitalization, which had been nearing $4 trillion, plummeted to approximately $3.4 trillion—a 7.6% decline in a single day.
Market Outlook Remains Volatile
As Bitcoin and broader cryptocurrency markets navigate increased volatility, industry participants are closely watching macroeconomic factors and potential support levels. Analysts warn that continued fragility in investor confidence, especially amid global economic uncertainty, could lead to further downward pressure.
