The Crypto Market Is in Turmoil: Drastic Bitcoin Price Drop

On Wednesday afternoon, January 3rd, the crypto world experienced an unexpected shock. The price of Bitcoin, the leading cryptocurrency, plunged over 7% in a matter of minutes, falling below the critical $42,000 mark. This dramatic price drop not only interrupted Bitcoin’s recent bull run, but also wiped out last week’s gains in a very short time.

If you want to read more about the crash of the price of Bitcoin and to be the first to find the most important financial news of the day, download for free our companion app Born2Invest, available for free for both Android and iOS devices.

Crash Data Analysis

According to CoinGecko, the price of Bitcoin fell 7.3% in the last 24 hours, at one point falling as low as $41,804. This sudden downward move resulted in the liquidation of over $550 million worth of crypto long positions, with $104 million worth of Bitcoin longs liquidated in the last hour alone.

Impact on other cryptocurrencies

Bitcoin’s crash also dragged down other leading cryptocurrencies. Ethereum, the second largest cryptocurrency, saw a decline of 8.8%, while Solana fell over 15%. Also affected were XRP, Cardano and Avalanche, which fell by over 10%, 14% and 15% respectively.

Background to the price of Bitcoin fall

This price drop comes at a critical time as the crypto market eagerly awaits the US Securities and Exchange Commission’s decision on whether it will approve multiple applications for spot Bitcoin ETFs in the coming days. Some analysts speculate that the decision could trigger a “sell-the-news” event.

Analyst opinions

Markus Thielen, an analyst at Matrixport, argued in a research note that the SEC is likely to reject all applications for a spot Bitcoin ETF in January. This contrasts with the optimistic outlook from analysts at Bloomberg Intelligence and JP Morgan.

Conclusion

The sudden collapse in Bitcoin price is a clear sign of the volatility and unpredictability of the crypto market. While some investors and analysts remain optimistic about the long-term future of Bitcoin and other cryptocurrencies, this incident reminds investors that high risks and uncertainties still prevail.

With the SEC’s impending decision on Bitcoin ETFs, the market could experience further turbulence, highlighting the need for careful risk assessment and strategic planning for crypto investors.

__

(Featured image by Mohamed_hassan via Pixabay)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in BLOCK-BUILDERS.DE. A third-party contributor translated and adapted the articles from the originals. In case of discrepancy, the originals will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us