Bitcoin (BTC) price briefly fell below $41,000 at 2:15 AM (UTC) on December 11, before suddenly falling 6.5% from $43,357 to $40,659 in 20 minutes.
At the time of publication, Bitcoin was slightly up from local lows at $41,960, per TradingView data.
Ethereum (ETH), the second largest cryptocurrency by market capitalization, also showed a sharp decline, falling more than 8.9% during the same period. Since then, the price of ETH has stabilized and is trading at $2,233, down 5.3% on this day.
Other large cryptocurrency assets including Binance Coin (BNB), Ripple (XRP), and Solana (SOL) also recorded losses.
The brief decline resulted in the liquidation of $270 million worth of long positions, according to data from CoinGlass. The decline also resulted in a loss of approximately $1.2 billion in BTC open interest, which currently stands at approximately $17.9 billion.
Interestingly enough, the decline came after Wolf of All Street’s Scott Melker pointed out that Bitcoin had just closed its eighth green weekly candle, adding, “When will we see a correction?” It showed up in just a few minutes.
#Bitcoin The one that just closed was the 8th green weekly candle in a row.
This week’s candle was a monster.
When do I fix it? pic.twitter.com/xxWjTxxLLr
— Wolves on Every Street (@scottmelker) December 11, 2023
The drop marked Bitcoin’s biggest one-day decline in a month, with it rising more than 12% over the past 30 days.
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However, Bitcoin has risen more than 150% since January 1 of this year. This upward trend has been largely driven by expectations that the US SEC will approve several spot Bitcoin exchange-traded funds (ETFs), allowing large institutions to gain significant exposure to the asset for the first time.
Bitcoin’s rise has heightened market expectations that the U.S. Federal Reserve (Fed) will begin lowering interest rates from the middle of next year.
Investors are also preparing for the next round of inflation data and the final FOMC meeting of the year. Most analysts expect core inflation to improve and are betting the Fed will keep interest rates at current levels.
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