Bitcoin’s price briefly dropped below $41,000 on Dec. 11, following a sudden 6.5% drawdown from $43,357 to a low of $40,659 in just 20 minutes. At the time of publication, Bitcoin was trading slightly higher at $41,960. The second-largest cryptocurrency, Ether, also experienced an 8.9% decline and is currently trading at $2,233, down 5.3% on the day. Other major cryptocurrencies, including Binance Coin, Ripple, and Solana, also posted losses.
The sudden drop caused more than $270 million worth of long positions to be liquidated and wiped out around $1.2 billion in open interest on BTC, which is currently sitting around $17.9 billion. This drawdown came only minutes after Bitcoin had just closed its eighth consecutive green weekly candle, prompting questions about a potential correction.
This is the largest single-day decline for Bitcoin in over a month, despite having grown more than 12% in the last 30 days. However, Bitcoin has rallied over 150% since the beginning of the year, driven by expectations of the United States SEC approving several spot Bitcoin exchange-traded funds (ETF) and the anticipation of the Federal Reserve cutting interest rates next year.
Investors are also preparing for the next round of inflation data and the final FOMC meeting of the year, with most analysts expecting improvements in core inflation and the Federal Reserve keeping rates unchanged.
Historically, Bitcoin’s price has been known to be highly volatile, experiencing rapid and significant fluctuations in value. This latest drawdown is part of the ongoing trend of volatility in the cryptocurrency market.
It’s important to keep in mind that the cryptocurrency market is subject to sudden and large price swings, and investors should exercise caution and conduct thorough research before engaging in trading or investment activities.
