Bitcoin Crashes to $97K, Triggers $400M Market Wipeout
Robust US economic indicators, including increased JOLTS job openings and strong ISM Services PMI, suggest fewer potential Fed rate cuts in 2025, contributing to Bitcoin’s price decline.
The cryptocurrency market saw massive liquidations totaling $381.56 million in 24 hours, with long positions accounting for nearly 87% of the wipeout.
Despite the correction, market sentiment remains optimistic as indicated by the Fear and Greed Index rising from 48 to 66, suggesting continued investor confidence in Bitcoin’s long-term prospects.
Bitcoin has lost the $100,000 price level after claiming it on Monday following a 3.94% price surge on the daily candle. These gains have been wiped off on Tuesday with the cryptocurrency crashing below the $2 trillion valuation, reaching a daily low of $97,153. At the time of writing, BTC trades at $97,785.84, down 4.27%.
According to the from CoinMarketCap, Bitcoin has a market cap of $1.93 trillion and a dominance of 56.4%. The cryptocurrency rose to a daily high of $102K on Tuesday, but then hit a wall of resistance and crashed. Further retests of the $100K-$102K price zone can be expected if Bitcoin rebounds from the minor support between $96,000 and $97,000.
On the other hand, the from Coinglass shows that a whopping $381.56 million was liquidated in the past 24 hours, with $331.20 million in longs and $50.36 million in shorts. In the past four hours alone, over $240 million was wiped off from the market, with $216.87 million in longs and $23.12 million in shorts.
Bullish Sentiment Persists Despite $400M Liquidation
Meanwhile, the Crypto Market Fear and Greed Index bullish, which suggests that investors are seeking to buy the dip and add more digital assets to their bags amid this slight downturn during a broader bull run. The Index last week read a value of 48 (neutral) and has since then soared to 66 (greed).
As reported earlier, as the demand from investors rose and the United States spot Bitcoin exchange-traded funds (ETFs) recorded a whopping $987.06 million on January 6th, as per SoSoValue . The bullish sentiment also stemmed from the upcoming president-elect Donald Trump’s inauguration day on January 20th.
Why Did Bitcoin Crash?
Bitcoin crashed after the US Bureau of Labor Statistics JOLTS job openings increased by 259,000 to 8.09 million in November 2024. This robust labor market data suggests fewer Fed rate cuts in 2025 as economic conditions improve.
Also, the ISM Services Purchasing Managers’ Index (PMI), a monthly indicator of business activities in the US, was much better than . As a result, the US economy seems to be improving, which could further reduce the number of rate cuts that investors would see in 2025. Notably, rate cuts are very bullish for bitcoin because they make volatile and risky investment instruments more lucrative for retail and institutional investors.