Bitcoin Falls Below $91,000 as $140M in Longs Liquidated in an Hour
Key Takeaways
- BTC price dropped from $93,000 to below $91,000 over the past 24 hours as market volatility persisted despite the Federal Reserve’s decision on a 25-bps rate cut for December.
- The drawdown resulted in more than $140 million in liquidations across bitcoin longs, as traders who were expecting the price to rise were forced to exit their positions after BTC failed to hold onto key intraday levels.
- However, this liquidation event has helped flush out excess leverage from the market, reducing speculative bets while creating more room for the conditions to stabilize ahead of a potential bull run that will be factored by the Fed rate cuts.
- Vanguard, PNC Bank, and Bank of America’s openness to allocating portions of their portfolios for crypto investments and allowing clients to gain exposure to regulated digital asset investment products will be key for the next move upside.
The price of Bitcoin (BTC) fell below $91,000 earlier today as the global cryptocurrency market endured a brutal 24-hour shakeout. The apex cryptocurrency showed continued volatility despite the U.S. Federal Reserve announcing a 25-basis-point (bps) rate cut on Wednesday.
BTC briefly spiked above $93,000 yesterday, only to fall back to the $90,000 range. Prices have fluctuated modestly over the past week, reflecting the broader market’s volatility.
Bitcoin Price Falls Below $91,000 as $140 Million in Leveraged Longs Were Liquidated
This drawdown was a targeted assault on traders betting on high prices as it triggered over $140 million in long liquidations across the market within a single hour, according to Coinglass data. The liquidations spiked as bitcoin failed to hold on to key intraday levels, causing a cascading effect across major exchanges and accelerating the downside pressure.
The price decline forced the unwinding of leveraged bets by traders who were hoping for prices to rise. Long liquidations typically occur when exchanges automatically close leveraged positions once the price moves against traders, causing them to lose their BTC in collateral.
Such large-scale liquidations often act as a market reset, flushing out excess leverage and resetting market positioning. Although the move may be painful for short-term leveraged traders, it helps reduce speculative froth and creates more room for the market to stabilize ahead of a potential rebound. The speed and scale at which the liquidation event took place suggest that there was over-leverage on the long end of the market.
CoinGlass analysts noted this marked a local exhaustion point for the crypto market, rather than a structural trend reversal. If the ongoing liquidation pressure subsides and spot market demand stabilizes, then bitcoin might make an attempt to consolidate above key psychological levels. However, volatility is expected to persist as traders reposition themselves following the purge of leveraged bets in the crypto futures market.
Also Read: Bitcoin-Hoarding Company Strategy Remains In NASDAQ 100
U.S. Fed Cuts Interest Rates by 25-bps, but Governors Remain Divided on Decision
Bitcoin’s price pullback comes amid mixed signals from the Federal Reserve. While the 25 bps rate cut to the 3.40% – 3.75% range was widely anticipated by the money markets, it was Fed chairman Jerome Powell’s cautious remarks and a 9-3 split among Federal Open Market Committee (FOMC) members that tempered enthusiasm for risk assets like crypto and stocks. Members who align with U.S. President Donald Trump’s call for lower interest rates voted for a 50-bps cut, while two Fed governors called for the rates to remain unchanged.
Analysts described the ongoing market decline as a “sell the fact” reaction, as markets had already priced in a potential rate cut ahead of the central bank’s announcement.
Vanguard, Bank of America, and PNC Bank Expand Crypto Access to Clients
A major bullish signal for bitcoin and the broader crypto market this month was $12 trillion asset manager Vanguard’s decision to allow clients to trade regulated crypto investment products, such as ETFs and mutual funds tied to BTC, Ether (ETH), XRP, Solana (SOL), and Litecoin (LTC), among others, through its brokerage platform. This marked a notable expansion in access to the crypto market for the Wall Street behemoth’s more than 50 million institutional and retail clients.
Vanguard, which has for the longest time disregarded crypto assets, was forced to reverse its policy following an internal review that suggested increased demand from clients for crypto exposure even during periods of high volatility. Its decision was also influenced by the track record of BTC and ETH spot exchange-traded funds (ETFs).
In another significant development, PNC Bank became the first major U.S. bank to offer direct spot BTC trading to eligible private clients. The bank with over $500 billion in assets under management is leveraging Coinbase’s crypto-as-a-service (CaaS) infrastructure to provide trading services through its digital platform.
Also, last week, the Bank of America issued guidance urging its wealth management clients to allocate between 1% to 4% of their portfolios to digital assets, signalling a major shift in its approach to BTC and crypto exposure.
At the time of writing, Bitcoin (BTC) is trading at $90,486 – down 1.38% in 24 hours.
Crypto & Blockchain Expert