The crypto market witnessed a massive sell-off in the Asian hours, with the global crypto market cap plunging by 5% to $1.57 trillion. Bitcoin price fell by 7% while top altcoins such as Ethereum (ETH), XRP, Solana (SOL), Cardano (ADA), DOGE and SHIB recorded major sales in a matter of minutes. The Crypto Fear & Greed Index drops from 82 (extreme greed) to 80.
Why is the crypto market suddenly falling?
Traders expected a correction in the crypto market as the market continued to recover. Popular Bitcoin analyst Willy Woo said BTC price has doubled in just two months without any setbacks, a correction is not that surprising. Corrections and pullbacks are crucial to confirming further rallies, especially during “extreme greed” and major macroeconomic events.
CoinGape initially warned of a possible correction coming this week. BTC price is expected to decline more as the Bitcoin-CME gap at $39.7K needs to be closed before any potential recovery occurs. Almost 5% and 8% of open positions (OI) are liquidated on CME and Binance, respectively.
Additionally, CoinGlass data shows a massive liquidation of over $400 million today, December 12th. The market saw $354 worth of long positions liquidated in just one hour. More than 119,000 Traders have been liquidated in the last 24 hours, with the largest single liquidation order OKis BTC-USDT SWAP valued at $8.23 Million. Due to position closures and sell-offs, the crypto market is in the red today.
The release of CME and PPI inflation data as well as the US Federal Reserve's announcement of its year-end interest rate decision this week further encouraged investors to liquidate their holdings.
Also read: $300 Million Liquidated While Bitcoin (BTC) and Altcoins See a Sharp Correction, What’s Next?
Bitcoin and Ethereum prices will continue to fall
Bitcoin and Ethereum prices are set for further declines in the US hour, with traders and whales considering another entry near support levels.
Popular crypto analyst Credible Crypto said: “We have not managed to break the 40,000 mark as expected.” He predicts that a complete rebalancing of the OI has resulted in the bullish market structure remaining intact and heading towards a Prepared for a rally above $50,000. He believes that BTC price could reach $60,000 in the next few weeks. Meanwhile, he continues to target an ETH price of $3,500.
BTC price is currently at $42,160, paring previous gains in the last few hours. The 24-hour low and high are $40,521 and $44,034, respectively.
ETH price is trading at $2243, down 5% in the last 24 hours. The 24-hour low and high are $2,171 and $2,376, respectively.
Also Read: Bitcoin (BTC) “Past performance is no guarantee of future results” – VanEck
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