MicroStrategy increased its position by 2.1 billion. BitCoin, on the other hand, briefly dropped back to 94,000. Why the sudden drop?

MicroStrategy increased the position by 21 billion, but the price of Bit coins suddenly plummeted by 94,000.

According to the U.S. Securities and Exchange Commission (SEC) data, enterprise-level whale MicroStrategy spent an average of $98,783 last week to once again spend $2.1 billion to purchase 21,550 BTC.

As of now, MicroStrategy holds 423,650 BTC, worth nearly $4.2 billion, accounting for over 2% of the total amount of BTC available for mining worldwide.

However, shortly after the news was announced, the cryptocurrency market experienced a painful massacre in the early hours of December 10th.

BTC fell rapidly from above $100,000 in just a few hours, falling to around $94,100 at one point, resulting in over 500,000 people getting liquidated for $1.7 billion, creating the second-largest liquidation wave in history.

Further reading: The second worst in crypto history! Over 500,000 people Get Liquidated, 1.7 billion coin, Alts may not have finished falling yet?

The reason for the sudden decline in BTC? Will it continue to fluctuate before the end of the year?

Why did BTC suddenly plummet from $100,000? Analysts have provided various explanations.

Japanese cryptocurrency analyst 'Virtual NISHI' points out that there may be two reasons for the decline in BTC:

CME Gap: After Bitcoin broke through $100,000 and filled the gap near CME's gap price, there was a large amount of profit-taking selling.

Leverage Overheating: The long positions in the derivatives market are overheated, triggering a chain reaction of Close Position.

Image source: CoinPostCryptocurrency perpetual contract market chain liquidation phenomenon

Although the liquidation situation in the cryptocurrency contract market has been quite severe in the past 24 hours, analysts remain relatively optimistic.

Markus Thielen, founder of 10x Research, believes that this decline is just a temporary consolidation phase in the market, and the Bull Market momentum will continue; QCP, a cryptocurrency trading company, has a similar view and believes that the range-bound trend will continue until the end of the year.

Thielen also suggests that during the pullback consolidation phase, investors should carefully select targets and try to avoid altcoins with lower market capitalization, focusing on core positions with higher credibility.

From the perspective of the overall economy, in the near future, several important economic data and events are coming, which may also trigger market risk aversion sentiment, such as the December 11th consumer price index (CPI) in the United States and the Federal Reserve interest rate decision (FOMC) on December 19th.

Comprehensive analysis suggests that this BTC big dump appears to be a common pullback trend in the Bull Market. However, investors still need to closely follow the upcoming economic indicators and market changes, and carefully evaluate investment strategies.

【Disclaimer】There are risks in the market, and investment should be cautious. This article does not constitute investment advice, and users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their specific situation. Investing based on this is at your own risk.

"Micro-strategy increase the position2.1 billion! Bit coin once fell back to 94,000, why suddenly kill a root?" This article was first published in the 'encryption city'