- The cryptocurrency market saw $635 million in liquidations after a sudden drop on Wednesday.
- Bitcoin fell 1.2% in 24 hours, while Ethereum dropped 4.6%, with larger losses for traders using leveraged positions.
- Analysts say the decline is mainly due to profit-taking, a stronger U.S. dollar, and Gold‘s recent rebound.
- Experts consider the pullback a normal correction, not a sign of a longer-term trend change.
- Market sentiment remains optimistic, with many expecting Bitcoin to reach new highs if support levels hold.
Bitcoin and Ethereum experienced a sharp downturn on Wednesday, resulting in $635 million in leveraged position liquidations across major crypto exchanges. The market pullback followed Bitcoin’s recent record high, with its price dropping 1.2% in the past 24 hours and now 3% below its peak of $126,080, according to CoinGecko.
Ethereum’s losses outpaced Bitcoin’s, falling 4.6% to $4,492 during the same period. Out of the total liquidations, $489 million were from long positions—traders who bet on prices going up. According to CoinGlass, Ethereum long liquidations reached $142 million, more than Bitcoin’s $114 million.
Ryan Lee, chief analyst at Bitget, told Decrypt the sell-off was driven by several factors. “Gold’s rebound this week has likely added to Bitcoin’s short-term pressure,” Lee said, noting that some investors are moving funds to gold. He also cited a stronger U.S. dollar, which hit a recent high, as making investors more cautious.
Experts do not see this drop as a shift in the overall trend for crypto. Lee described the move as a “healthy correction”, expecting another slight decline before a potential recovery above $126,000. If this support holds, analysts forecast possible gains to between $132,000 and $135,000, especially with continued interest from crypto investment funds called ETFs.
Prediction markets like Myriad show optimism, with a 57% probability that Bitcoin will rally to $140,000 rather than falling to $110,000.
Analysts continue to point to broader economic factors supporting Bitcoin, including concerns over government debt and demand for reliable assets. Austin King of decentralized finance company Nomina stated he expects the last quarter of the year to bring renewed interest in crypto as investors look for protection from global instability.
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