Bitcoin Drops Below $100K as Crypto Market Faces $500M Liquidations

Key Highlights

• Liquidations Surge: Coinglass data reveals liquidations of approximately $206 million in crypto positions within an hour.
• Bitcoin Price Action: $BTC plummeted by 4%, hitting a low of $97,207, resulting in a 4.5% decline in global crypto market capitalization to $3.44 trillion.
• Altcoin Weakness: Ethereum $ETH, Ripple $XRP, and Solana $SOL experienced significant losses, dropping over 5% within 24 hours.

Crypto Market Overview

The global cryptocurrency market witnessed a sharp decline, shedding 6% within 24 hours as total market capitalization dropped to $3.2 trillion. Traders faced over $500 million in liquidations due to negative sentiment following the release of stronger-than-expected U.S. jobs data.

Bitcoin Market Updates

Bitcoin's (BTC) promising start to 2025 was cut short on Tuesday, its price falling 6% to find support at $97,000. Despite this downturn, Bitcoin ETFs saw $987 million in inflows on January 6, largely attributed to optimism following Michael Barr's resignation.

Altcoin Market Highlights

Major altcoins also suffered significant losses, with a $220 billion outflow from the market over the past 24 hours.

• Avalanche $AVAX: Price declined by 11%, dropping from $45 to $33.
• Chainlink $LINK: Fell by 10.4%, hovering just above $20 support.
• Ripple $XRP: Lost 7%, driven by profit-taking from long-term holders.

Market Liquidations

Futures traders endured over $500 million in losses, with Bitcoin ($4.93M) and Ethereum ($8.16M) contributing most to liquidations. Altcoins like Dogecoin (DOGE) and Solana (SOL) faced liquidation volumes of $3.86M and $3.72M, respectively.

Bearish Drivers

Bearish sentiment was fueled by hawkish comments from Federal Reserve Chair Jerome Powell, who hinted at slower rate cuts during the December 17 FOMC meeting.

Regulatory and Political Updates

• Coinbase Granted Legal Appeal Against SEC: Coinbase was allowed to challenge SEC claims in the Second Circuit Court of Appeals, temporarily halting district court proceedings.
• CFTC Chair Rostin Behnam Resigns: Behnam announced his resignation, effective January 20, after promoting strict crypto regulation.
• Canadian PM Front-Runner Supports Crypto: Pierre Poilievre, a candidate for Canadian Prime Minister, advocates for cryptocurrency and DeFi, opposing CBDCs.

Trigger for the Dip

The sudden Bitcoin dip resulted from hotter-than-expected U.S. macroeconomic data, sparking risk-off sentiment across financial markets. Stronger-than-expected ISM index and JOLTS job openings data indicated a resilient U.S. economy, increasing expectations of tighter monetary policy from the Federal Reserve.