Get Liquidated 300,000 people, 1 billion pounds evaporated! BTC fall below 96,000, why has it been falling for the past two days?

BTC once fell below 96,000, more than 300,000 people Get Liquidated

After BTC surged to 108,000, it retraced. As of this morning (12/20), it once dropped below 96,000 US dollars and is currently temporarily rebounded above 97,000 US dollars.

Other cryptocurrencies performed even worse, including Ethereum ($ETH), which dropped below $3,500, while coins like Cardano ($ADA), Chainlink ($LINK), Aptos (APT) experienced a decline of 15%-20%.

According to CoinGlass data, in the past 24 hours, over 300,000 people have been Get Liquidated in the cryptocurrency market, with a total amount of Get Liquidated reaching 1.03 billion US dollars. Among them, the amount of Get Liquidated for long positions (buy orders) exceeded 800 million US dollars, resulting in heavy losses. The largest single Get Liquidated order occurred on Binance, with someone's ETH/USDT order getting liquidated for 15.8 million US dollars.

Image source: CoinGlass 12/20 perpetual contract market Get Liquidated data

Why did BTC fall? The Fed's hawkish tone for 2025 severely hit the market

According to foreign media CoinDesk, this round of decline is mainly due to the hawkish comments of Federal Reserve Chairman Powell.

The latest dot plot forecast from the Federal Reserve predicts only two rate cuts in 2025, far below market expectations, disappointing investors. Joel Kruger, market strategist at LMAX Group, said that the market has been in a state of tension since BTC fell below $100,000, and the impact from the traditional market this time is too significant to ignore.

In the traditional market, the US Dollar Index (DXY) broke through 108, reaching a new high since November 2022. The yield on 10-year US Treasury bonds also surged to over 4.6%, reaching the highest level since May. These factors have put pressure on the cryptocurrency market.

Will BTC keep dropping? Analysts predict at a glance

Although BTC has entered a short-term retracement and oscillation trend, operators and analysts do not believe that the bull market has ended.

Morph co-founder Azeem Khan said that the pullback from BTC's annual gain is healthy. Historical trends show that there is often a sell-off at the end of the year because investors offset profits with losses to reduce tax liabilities.

Glassnode's analysis points out that since the first bull market of BTC in 2012, the pullback amplitude of each bull market cycle has tended to decrease:

The maximum pullback in bull market cycles since 2024 has been 32% as of 2021, 63% in 2021, 36% in 2017, 71% in 2013, and 49% in 2011.

Source: GlassnodeBTC Bull Market Cycle Maximum Drawdown Chart

Glassnode believes that the change in the magnitude of the BTC bull market cycle's pullback may reflect the significant demand brought by spot ETFs and the growing interest of institutional investors.

Glassnode founder Rafael Schultze-Kraft further pointed out that, from the cost basis distribution of BTC, $97,000 to $99,000 is an important short-term support area. BTC researcher Axel Adler also agrees with this view, pointing out that $97,900 is the recent important support level.

In the medium to long term, the bull market structure of BTC remains intact. Technical analysis shows a price gap (FVG) and 50-day moving average support between $95,000 and $97,500.

However, if the daily closing price falls below $95,000, BTC may further decline to the critical liquidity area of $90,000. Currently, most traders are focusing on the performance of BTC between $95,000 and $100,000.

Disclaimer: The market carries risks, and investments should be made with caution. This article does not constitute investment advice, and users should consider whether any opinions, viewpoints, or conclusions in this article are applicable to their specific situation. Any investments made based on this article are at your own risk.

'Get Liquidated 300,000 people, 1 billion pounds evaporated! BTC falls below 96,000, why has it been falling for these two days?' This article was first published in 'Crypto City'.