Bitcoin’s price fell sharply, dropping over 9% to $92,118 (at 6:30 a.m., 21st of December, 2024 Eastern Time). This was one of the steepest declines for the cryptocurrency this month.
The Impact of the drop on the Crypto Market
The entire cryptocurrency market also faced a major downturn, losing 11.94% of its value and dropping to a total market cap of $3.13 trillion.
Other cryptocurrencies (altcoins) also experienced large losses. Coins like GIGA, CVX, TEL, and GOAT fell between 24% and 27% in one day, causing panic among investors.
The chaos spread to the derivatives market (where people trade on predictions of price movements) where $1.4 billion worth of positions were liquidated (wiped out). Bitcoin long positions (bets that Bitcoin’s price would rise) lost $270 million. In total, 427,928 traders lost their money due to the rapid price swings.
Experts believe the drop happened because of economic uncertainty and reduced investor confidence. Although Bitcoin is designed to operate independently of central banks, its price is still influenced by global economic conditions.
Altcoins on their part are experiencing even wilder fluctuations than Bitcoin. Speculative investments, like meme coins, are particularly risky when the market becomes unstable.
This sharp drop in Bitcoin and the broader market is a warning for investors to be cautious. The market’s unpredictable nature, especially during dramatic rises and subsequent sell-offs, highlights the risks of crypto trading.
Final Thoughts
The volatile and risky nature of cryptocurrency markets is once again experienced. Investors ought to be cautious amid these rapid price changes.
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