Bitcoin's recent bullish momentum came to an abrupt halt on Tuesday (10th) as the cryptocurrency plunged 3% under sudden selling pressure. This triggered the largest liquidation wave in history, affecting nearly 590,000 traders worldwide with losses totaling $17.6 billion (~RM78 billion).
Key Market Movements
- Price Drop: Bitcoin fell to $94,621.45 (~RM418,517) at 6:00 PM UTC (2:00 AM Malaysia Time), marking a 3% decline within 24 hours.
- Recovery Attempt: By 10:50 AM Malaysia Time, Bitcoin slightly recovered but remained 0.3% lower at $97,350 (~RM430,589).
Liquidation Crisis
Data from Coinglass reveals 58,227 traders faced liquidations due to Bitcoin's crash and subsequent cryptocurrency market collapse. Notable highlights:
- Largest Single Liquidation: A Binance futures contract worth $19.69 million (~RM87 million).
- Total Liquidations: $754.44 million (~RM3.3 billion) in 24 hours, accounting for 42.93% of global liquidations.
👉 Why Bitcoin’s Volatility Matters for Investors
Market Sentiment Shifts
Contributing Factors
- Economic Uncertainty: Upcoming U.S. inflation data and potential Federal Reserve rate adjustments fueled caution.
- Institutional Moves: Bhutan’s government reportedly executed large Bitcoin trades, possibly destabilizing the market.
- Quantum Computing Fears: Google’s "Willow" quantum processor raised concerns about blockchain security vulnerabilities.
MicroStrategy’s Bold Bet
Despite the crash, MicroStrategy purchased an additional $2.1 billion (~RM93 billion) in Bitcoin. Analysts speculate this could indicate:
- Withdrawal of large现货 (spot) orders, exacerbating volatility.
- Long-term bullish sentiment from institutional players.
Cryptocurrency Market Fallout
- Derivatives Market: $1.6 billion (~RM7.1 billion) in long positions liquidated (Coinglass).
- Total Market Cap Loss: ~$200 billion (~RM8.848 trillion) wiped out in 24 hours (CoinGecko).
Political Influence
Post-U.S. election trends under President-elect Trump initially boosted the market, including:
- $10 billion (~RM442 billion) influx into U.S. Bitcoin ETFs.
- Rumors of a U.S. Bitcoin strategic reserve.
👉 How to Navigate Crypto Market Crashes
Skepticism and Criticism
Bloomberg labeled the crash "the largest crypto fraud to date", arguing Bitcoin:
- Lacks industrial utility.
- Operates detached from real economies.
- Relies solely on speculative "greater fool theory" dynamics.
FAQ
Q: Why did Bitcoin crash suddenly?
A: A combination of profit-taking, macroeconomic uncertainty, and large-scale liquidations triggered the drop.
Q: Is Bitcoin’s price recovery likely?
A: Historical patterns suggest volatile rebounds, but long-term stability depends on institutional adoption and regulatory clarity.
Q: How does MicroStrategy’s purchase affect the market?
A: While signaling confidence, such large buys can temporarily reduce liquidity, increasing price swings.
Q: Should investors avoid Bitcoin during crashes?
A: Diversification and risk management are key. Some view dips as buying opportunities, but assess personal risk tolerance first.
Q: What’s the impact of quantum computing on Bitcoin?
A: Theoretical threats exist, but practical quantum attacks on blockchain remain years away.
Q: Are Bloomberg’s fraud claims valid?
A: Critics argue Bitcoin’s speculative nature mirrors past asset bubbles, but proponents highlight its decentralized/store-of-value attributes.