627 Million Dollars Wiped Out as Bitcoin Plummets to $96,000, Affecting 204 Thousand Traders

The cryptocurrency market has seen a rapid downturn within the last 24 hours, leaving numerous traders in unfavorable positions as Bitcoin experiences a descent to newer foundations of support.

Barely a day ago, a sense of renewed confidence seemed to sweep through the digital asset market, driven by an upturn since the new year’s start, which saw Bitcoin ascend back to the impressive $100,000 mark.

Yet, in a swift turnaround, the market has plunged into bearish territory, leading to considerable losses for leveraged traders.

Catastrophic Day for Over 204K Crypto Speculators

A staggering number of more than 204,000 traders have faced liquidation in the current 24-hour window, with the aggregate liquidations totaling approximately $627 million, as presented by the CoinGlass figures at this report’s time.

The vast majority of these liquidations are long positions, with about $566 million eradicated due to the market’s sharp plunge, taking many traders by surprise.

Bitcoin saw a roughly 7% drop, falling from near $103,000 to around $96,000, while other cryptocurrencies such as Ethereum, XRP, and Solana followed suit with declines nearing 10%, 8%, and 11% from their peak values, respectively.

Is the U.S. Economic Climate Responsible?

In relation to recent fluctuations, U.S. economic announcements seem to play a part. On January 7, a report from the U.S. Bureau of Labor Statistics indicated that 8.1 million job openings were unfilled at the end of November 2024, marking the most significant number since May 2023 and exceeding the 7.74 million projection by analysts.

These solid figures were followed by a shift to cautious trading that impacted markets broadly, with tech stocks like Nvidia and Tesla experiencing declines. The reaction from the market hints that hopes for increased rate cuts from the Federal Reserve are dwindling, amidst signs of persistent strength in the U.S. economy.

The digital currency market has historically shown heightened sensitivity to such liquidity scenarios. Crypto assets often benefit from additional liquidity; however, expectations of sustained lower liquidity drive capital towards more stable assets as inflows to riskier holdings like cryptocurrencies diminish.

An example was observed in December 2024 when Bitcoin initially dropped beneath the $100,000 milestone, triggered by Fed’s announcement that only two interest rate cuts would occur in 2025, instead of the previously anticipated four.

Despite these tremors within the market landscape, crypto options trading platform Greeks.live suggests that Bitcoin’s bullish trajectory remains unshaken.