Bitcoin’s price dropped to $96,256 after failing to sustain its momentum near the psychological $100,000 mark. The decline comes after a rally of 44% since November 5, driven by optimism following Donald Trump’s election victory. Bitcoin had climbed to a high of $99,645 on November 22 before shedding over $60 billion in market capitalization during its pullback.

The broader cryptocurrency market faced significant liquidations, totaling more than $500 million in the past 24 hours. Data from Coinglass shows that 197,551 traders were impacted, with long positions accounting for $380 million of the liquidations and short positions making up $120 million. Bitcoin alone contributed $70.4 million to these losses, while Ethereum added $43.4 million. Other notable cryptocurrencies such as Dogecoin and XRP saw liquidations of $35.3 million, while smaller altcoins like Stellar and Sandbox also experienced steep declines.

Stellar, which had surged by 50% earlier in the week, was caught up in the downturn. Dogecoin, which had recently reached its highest level since May 2021, also lost steam. Analysts attribute the volatility to macroeconomic and geopolitical factors. Escalating tensions in the Middle East have driven investors toward traditional safe-haven assets, diverting funds from cryptocurrencies. Additionally, the strength of the U.S. labor market and adjustments by the Federal Reserve have created a mixed environment that enabled Bitcoin’s earlier rally but now weighs on its price.

Historical trends suggest that Bitcoin’s parabolic runs are often followed by corrections of around 80%, raising concerns about further losses. Analysts like Peter Brandt have forecast potential declines to $91,583 or even $85,610. Technical indicators such as the TD Sequential, RSI bearish divergence, and an impending MACD bearish cross suggest more downside potential. $94,200 is seen as a critical level for Bitcoin in the near term.

This liquidation event ranks among the largest in six months, with Bitcoin and Ethereum accounting for $121 million in combined losses. Market activity has surged as traders from the 2020-2021 bull cycle revisit undervalued tokens. Despite the turmoil, Bitcoin’s dominance remains robust at 56.2% of the $3.46 trillion cryptocurrency market, and trading volume has hit $48.9 billion as investors stay engaged.

While the short-term outlook remains challenging, historical data indicates that recoveries are often seen in December. Analysts urge caution and stress the importance of managing risks as the market searches for stability.