The crypto market suffers a significant setback with a massive cryptocurrency liquidation event, as Bitcoin loses the 90,000 dollar level. Andrew Hayward reports how digital assets diverge drastically from traditional markets on this volatile December day.
The digital asset market faced a severe correction this Friday, marked by an abrupt drop in the prices of major coins. Bitcoin descended to 88,420 dollars before stabilizing slightly, recording a loss greater than 3% in the last 24 hours. This bearish trend dragged Ethereum with it, which struggles to stay above the psychological support of 3,000 dollars. Volatility did not stop there; other major altcoins like XRP and Solana suffered even sharper setbacks, with drops of 4% and 7% respectively.
Hard data reveals considerable financial bleeding for leveraged traders within the sector. According to figures provided by CoinGlass, total liquidations amounted to more than 493 million dollars in a single day. The vast majority of these losses, approximately 412 million, corresponded to long positions betting on rising prices. Bitcoin topped the list of affected assets with 191 million dollars wiped out, evidencing the fragility of speculative bets at such elevated price levels.
On the other hand, the impact extended to the stocks of companies linked directly to the cryptographic ecosystem. Miners like CleanSpark suffered hard blows with drops of 8%, while Bitfarms and Hive Digital retreated around 5%. Even giants like Coinbase and MicroStrategy failed to escape the selling pressure, recording moderate losses during the session. This behavior contrasts sharply with the stability observed in other technology sectors unrelated to the blockchain.
Why is the crypto market falling while Wall Street celebrates?
The context of this move is particularly intriguing given the opposite behavior of traditional financial markets. While cryptocurrencies bleed, the S&P 500 index nears new all-time highs, driven by investor optimism. Expectations of a third interest rate cut by the Federal Reserve fuel stock market euphoria. This divergence underscores a temporary disconnect between risk appetite in stocks and the extreme caution currently dominating digital assets.
It is important to highlight that this is not the first time Bitcoin has shown such recent volatility after reaching price milestones. After touching an all-time high of 126,080 dollars in October, the cryptocurrency has experienced deep corrections, falling almost 30% from its peak. This behavioral pattern suggests an extended consolidation and profit-taking phase that continues to shake out the most unstable investors. The inability to sustain the 92,000 dollar level this week has reactivated fears of a deeper short-term correction.
Likewise, the current situation highlights the inherent risks of excessive leverage in markets that are still seeking maturity. The digital economy remains susceptible to cascading movements where forced sales exacerbate price drops initiated by technical or macroeconomic factors. The flushing out of leveraged positions, while painful, is often considered necessary to re-establish a healthier and more sustainable market base.
Are we facing the start of a crypto winter or a healthy correction?
The implications for the market are mixed, presenting both immediate challenges and potential reentry opportunities. The price drop could be interpreted as a buying opportunity for institutional investors looking to accumulate at lower levels. However, the technical weakness shown by Ethereum and Solana could indicate that bearish pressure has not yet finished exhausting itself. Investors will need to watch key support levels closely in the coming days to confirm if the trend reverses.
Finally, attention will focus on the upcoming Federal Open Market Committee (FOMC) meeting and its decision on rates. While the stock market has already priced in a positive scenario, any surprise could realign the correlation between crypto and stocks again. Bitcoin’s ability to reclaim the 90,000 dollar zone will be decisive in defining the year-end sentiment. Traders remain on high alert, aware that in this sector, calm often precedes the storm.
