Massive Crypto Market Selloff: Bitcoin Falls to $95K, Altcoins Plunge 20%
A sweeping selloff across cryptocurrencies led to significant losses, with altcoins plummeting up to 20% and Bitcoin retreating to $95,000.
Dec 9, 2024
Bitcoin fell 5%, while major altcoins like Cardano, Avalanche, and XRP dropped around 20%.
Over $750M in leveraged positions liquidated as crypto markets faced sharp declines.
Analysts expect brief consolidation before the bull market regains strength.
The cryptocurrency market faced a dramatic downturn on Monday, with prices of most major digital assets sharply retreating. Bitcoin, which had briefly traded above $100,000 earlier in the day, fell back to just above $95,000 by late in the U.S. session, marking a 5% decline over 24 hours. Meanwhile, altcoins experienced even more significant losses, with the broader CoinDesk 20 Index down over 8% during the same period. Cardano (ADA), Avalanche (AVAX), and XRP (XRP) each plunged approximately 20%.
The selloff triggered liquidations of over $750 million in leveraged derivatives positions, the bulk of which were bullish bets. This event ranked among the largest liquidations in recent months, comparable to the August 5 crash and last week’s sharp correction when Bitcoin fell from $100,000 to $90,000 in a matter of hours.
Market analysts cited a combination of declining trading volumes, profit-taking by long-term holders, and waning momentum as factors contributing to the selloff. "This is likely to be only a brief consolidation phase before the bull market regains momentum," noted Markus Thielen, founder of 10x Research, in a Monday report. He emphasized the importance for traders to focus on strong, high-conviction positions and to avoid weaker segments during this period.
Options traders have also adjusted their strategies, signaling expectations of sideways price movement through the end of the year. Many are taking profits on earlier bullish positions while extending their bets into early next year. "Although we’re still structurally bullish, spot prices are likely to range here for the remainder of the holiday season," observed digital asset hedge fund QCP in their analysis.
While the current downturn has shaken confidence in some areas of the crypto market, many analysts view it as a temporary setback. The consolidation phase could pave the way for a more selective and strategic rally, where not all assets rise uniformly. For now, traders and investors are advised to approach the market with caution, focusing on strong assets and maintaining long-term perspectives.
