Over $1 trillion reportedly have been pulled out of the digital assets market amid the ongoing slump. Bitcoin (BTC), the most expensive crypto asset in the market, has been clocking consistent price slips for the last few weeks. Between October and December this year, majority of tailed Bitcoin – leading to massive liquidations and the subsequent market crash.
On Friday, November 21 Bitcoin fell to its seven month low of $85,500 – having clocked a weekly loss of nearly 12 percent. In the beginning of October, BTC was trading at $120,075.
On October 10, however, the market winds turned choppy after the U.S. President Donald Trump had imposed an additional 100 percent tariffs on China, claiming that the Asian nation had been trying to establish tight “export controls” internationally. The market had reacted strongly to this development and had clocked liquidations worth $6 billion within an hour of President Trump’s announcement.
Traders liquidate when their margin balances drop under the maintenance margin because of unfavorable price movements. Following Trump’s announcement, the liquidations had eventually dipped to a whopping 19 billion within a day, following which the crypto prices have been on a downward slide.
It is after this instance that Bitcoin had started to recede from its higher price points. The asset dropped from $120,000 to $112,000 within days eventually sinking to $104,000 on November 17.
While whales like Michael Saylor’s Strategy and El Salvador are on a streak to acquire BTC tokens amid the dip, the social media is bustling with panic messages. After all, the asset had just hit a new ATH of $126,198 on October 6 and now it is down by over $40,000 within weeks.
For now, market winds remain choppy as traders await clearer macro signals. Even if the market does log growth, it’s possible that the rally is gradual. Historically, December has been more slow and stable in terms of price action because of the holidays.
The crypto market cap, which was trading at $3.8 trillion as of October 11 has now tumbled to $2.83 trillion over the last 24 hours.
Developments like the U.S. Federal Reserve rate cuts and a surge in institutional demand can increase spot ETF inflows could trigger a market rally in the coming months.