The broader digital currency ecosystem was stunned on Dec. 9 when the market shed almost $2 billion in combined crypto liquidations. To help the market understand what happened, crypto analyst Ash Crypto on X detailed the events that triggered the biggest sell-off since 2021.
Crypto liquidations started on Coinbase
According to the analysts, the market sell-off started on Coinbase as traders began selling about an hour before the major dump-off. He noted that the selling pressure triggered the “liquidation like a domino.”
THE BIGGEST LIQUIDATION SINCE 2021!
WHY DOES THE MARKET DUMP AND WIPE ALMOST $2 BILLION TRADES IN JUST 24 HOURS?
HERE’S WHAT HAPPENED:
1. COINBASE TRADERS STARTED THE SELL-OFF.
COINBASE TRADERS BEGAN SELLING 1 HOUR BEFORE THE MAJOR DUMP. THE SELL PRESSURE PUSHED THE… pic.twitter.com/upknm2uftF
— Ash Crypto (@Ashcryptoreal) December 10, 2024
With the market hitting a key liquidation zone, he said it was game over as stop-losses were triggered in a chain reaction. The overheated market saw funding fees surge, with Open Interest (OI) also soaring as traders took new positions.
After this scary sell-off, strong buying pressure reemerged on Ethereum. Traders saw ETH as a safe bet as the coin has a rather smaller drawdown when compared to Bitcoin. The price of XRP dropped by over 12% to as low as $2.06 in the broad-based sell-off.
The analyst said XRP still has thin liquidity, thus impacting its spike potential. Amid the sell-off, Cardano (ADA), USDC and FDUSD recorded an insane boost in volume.
What now?
Already, the market is recovering from the unexpected drawdown. The price of Bitcoin was changing hands for $97,658, down by merely 0.68% in 24 hours. Most altcoins, including Solana (SOL) and Binance Coin (BNB), have also lifted off their steep falls.
According to Ash Crypto, the liquidation must have wiped out “weak hands” and allowed smart money to buy the dip at a discount. Ultimately, he projected that the coin’s price is bound to “snap back quickly.”
The market still has the right anchors that helped it grow over the past few weeks. MicroStrategy made a big $2.1 billion Bitcoin purchase this week, proof of strong institutional presence on the market.
Experts are predicting a swift recovery for the market, with Robert Kiyosaki advocating that people should buy Bitcoin now.
