Bitcoin Plunges Below Key Support Level, Triggering Massive Market Liquidation
Sharp Price Drop and Market Downturn
Bitcoin’s price has recorded a sharp drop of nearly 5.5% over the past day, falling below the $100k support level for the first time since January 20. This decline coincided with a broader downturn in the crypto market, which declined by 8% during the same period.
Major Cryptocurrencies Affected
Major cryptocurrencies, including Ethereum, XRP, Solana, Dogecoin, and Cardano, experienced even greater losses, ranging between 9% and 17%. These significant price drops have left investors and analysts wondering about the potential impact on the market.
Analysts Warn of Potential Correction
Closely followed crypto trader and former BitMex CEO Arthur Hayes warned of a looming ‘mini financial crisis’ that he believes could lead to a Bitcoin correction to $70k-75k level. Hayes stated,
The Ugly will be published tomorrow morning. I am calling for a $70k to $75k correction in $BTC, a mini financial crisis, and a resumption of money printing that will send us to $250k by the end of the year.
Mass Liquidation Event
Bitcoin’s recent price drop triggered an $854.39 million mass liquidation event, wiping out nearly $794.5 million in leveraged long positions within 24 hours. This significant liquidation has raised concerns about the market’s stability.
Impact of China’s AI App Debut
The debut of China’s AI app, DeepSeek, has sent shockwaves through the tech and crypto space. According to market analyst Adam Kobeissi, the launch of DeepSeek has likely spooked traders, leading to the recent crash. Kobeissi stated,
Risk-off is the theme as DeepSeek scares investors.
Tips for Investors
As the market experiences a downturn, investors are advised to:
- Stay informed about market trends and analysis
- Monitor their investments closely
- Consider diversifying their portfolios
- Keep a long-term perspective
Expert Insights
Georgii Verbitskii, founder of TYMIO, disagreed with Hayes, arguing that the recent sell-off is a cool-off following the crypto market bull run that began after Trump’s presidential win. Verbitskii stated,
The recent Bitcoin price dip is, in my opinion, a natural cooling off after the exciting rally that began on November 5th. While some market players like Arthur Hayes are predicting a correction to $75k, I donβt share that expectationβBitcoinβs fundamentals remain strong.
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