Bitcoin experienced a swift reversal, erasing nearly a week’s worth of gains within just 20 minutes on Sunday night in New York.
Around 9:00 p.m. ET, the cryptocurrency faced a steep 6.5% decline, dropping from over $43,300 to as low as $40,659, based on TradingView data.
By Monday morning, Bitcoin was trading around $41,711, marking a 4.8% decrease in the past 24 hours.
Other major cryptocurrencies like Ether and Solana also witnessed a sell-off as trading kicked off in Asia and continued during North American trading hours.
The exact cause behind this sudden downward movement remains unclear. Coinglass data noted substantial liquidations within a 12-hour period, totaling over $335 million across cryptocurrencies, with long positions accounting for about $300 million. Bitcoin alone saw liquidations exceeding $89 million.
Traders brace for volatility this week, anticipating key inflation data on Tuesday and the Federal Reserve’s monetary policy decision on Wednesday. The stock market reflects this uncertainty as investors prepare for a series of events.
Most predictions from Wall Street foresee no adjustments to interest rates until early 2024. ING economists, however, project six rate cuts by the Fed next year.
Last week, cryptocurrencies were on an upswing, with Bitcoin surpassing $44,000 on December 6. Other tokens saw robust gains amid growing optimism surrounding events like the potential approval of a spot Bitcoin ETF in the US and the upcoming Bitcoin halving in mid-2024.
Despite the week’s initial sell-off, Bitcoin has shown over 150% gains throughout 2023.
Glassnode data suggests that the relatively low supply of Bitcoin in circulation has contributed to this momentum. Long-term investors holding onto their tokens have driven this trend, with reports indicating a record amount of held Bitcoin among wallets displaying minimal spending history, reaching 15.4 million.
