Bitcoin experienced a significant decline, dipping below the $95,000 mark for the first time in six months, as a broader wave of risk aversion spread through financial markets. This downturn saw investors withdraw nearly $900 million from exchange-traded funds, signaling a growing lack of confidence among cryptocurrency investors. On Friday, Bitcoin reached a low of $94,455, continuing its downward trajectory from the November 11 high of $107,482. The cryptocurrency’s value has fallen by approximately 7% in the past 24 hours, putting its year-to-date gains at risk after having traded at a peak of $126,251 in early October and closing out the previous year at $93,714.
In a commentary on the situation, Tether CEO Paolo Ardoino referred to the event as “Bitcoin black Friday” in a tweet, reflecting the abrupt shift in market sentiment. The sell-off has led to over $1.38 billion in liquidations across the crypto market, with Bitcoin trading alone accounting for $676 million of this figure. Notably, the largest individual liquidation was a $44 million long position in BTC on the HTX exchange.
The entire cryptocurrency ecosystem remains under pressure, following a previous liquidation event on October 10 that saw $19 billion wiped from the market, diminishing the total value of all cryptocurrencies by over $1 trillion. Data from CoinGlass indicated that the recent sell-off primarily affected long positions, which amounted to $1.21 billion, while short positions accounted for $157.36 million. A staggering total of 278,152 traders were impacted during this downturn.
In addition to internal market pressures, external economic factors are contributing to the decline. Recent economic data emerging from China, combined with diminishing expectations for a Federal Reserve interest rate cut, has further exacerbated the situation in both cryptocurrency and equity markets.
In a somewhat contrary indicator, Tether’s dominance rate has surged to its highest level since April, a trend often seen as characteristic of Bitcoin bear markets. CryptoQuant CEO Ki Young Ju suggested that it might be premature to label the current situation as a bear market, highlighting that the critical cost basis is near $94,000. He expressed caution, stating, “I do not think the bear cycle is confirmed unless we lose that level. I would rather wait than jump to conclusions.”
As the cryptocurrency market navigates this turbulence, investors are left grappling with uncertainty, and many are closely monitoring key price levels that could influence future trends.
