Why Is Crypto Market Down Today? Bitcoin Liquidations Hit $1.5 Billion
The cryptocurrency industry has seen increased volatility over the past 24 hours, with Bitcoin (BTC) price falling more than 6% in the past 24 hours, hitting a daily range low of around $94,725. The altcoin industry has been severely affected by Bitcoin’s sudden drop, with TOTAL2 down more than 15%, equivalent to more than $258 billion.
As a result, the total cryptocurrency market capitalization fell by more than 7% during early Asian trading on Tuesday, December 10, hovering around $3.58 trillion. Nonetheless, there are a few altcoins that have recorded significant gains over the past 24 hours, led by Baby Doge Coin ($BABYDOGE) and Movement (MOVE).
Major Factors Leading to Today’s Cryptocurrency Sell-Off
Quantum Bitcoin FUD
On Monday, tech giant Google Announce Launched the next generation quantum chip Willow. Willow can perform benchmark calculations in five minutes that would take one of today’s fastest supercomputers a billion years, a figure that exceeds the known age of the universe, according to the company.
While the news is significant for the tech industry, it is a huge shock to the entire cryptocurrency industry, especially Bitcoin (BTC). In addition, Bitcoin’s cryptography relies on difficulty adjustments, which often take more than five minutes, thus potentially giving Google’s Willow quantum chip a theoretical advantage.
However, experts believe that Bitcoin could simply adapt to quantum computer attacks with necessary difficulty adjustments and security upgrades.
Bitcoin Nation Retrospective
On Monday, data analysis revealed that the Royal Government of Bhutan transferred 406 Bitcoins worth approximately $40 million to QCP Capital. As a major holder of Bitcoin, the Royal Government of Bhutan, with a balance of over $11,000, will remain the main potential threat to bullish sentiment.
Meanwhile, reports suggest that El Salvador may ease the country’s Bitcoin adoption agenda in order to reach an agreement with the International Monetary Fund on a $1.3 billion loan.
Leverage and futures markets cool down
Cryptocurrency markets have also experienced greater selling pressure as liquidations intensified in the leveraged industry. According to the latest market data, more than 582,000 traders have had their positions liquidated in the past 24 hours, with a total liquidation amount of more than $1.7 billion.
Notably, over $1.5 billion was involved among long traders, thus triggering more long squeezes as more traders tried to catch the falling wave. Meanwhile, total cryptocurrency open interest (OI) fell from over $138 billion to around $123 billion as of this writing.
on the other hand
Despite the cryptocurrency’s sudden sell-off, institutional investors continued their previous Bitcoin accumulation cycle. The total supply of Bitcoins on centralized exchanges has dropped by more than 10,000, hovering around 2.25 million.
BlackRock’s IBIT leads U.S. spot Bitcoin ETF issuers in BTC accumulation, suggesting the potential for a sharp rally and bullish continuation in the near term.
