Crypto liquidations hit $1B as traders were ‘unprepared for bad news’

More than $1 billion has been liquidated in the crypto market over the past 24 hours as market participants were caught off guard by the strong momentum for crypto over the past 30 days.

However, the analyst suggests the market downturn may be short-lived.

“We’ve had such a bullish narrative over the last month that the market was completely unprepared for bad news. Now we’re seeing indiscriminate selling,” Swyftx lead analyst Pav Hundal told Cointelegraph.

‘Short-term angst,’ says analyst

“It’s not the start of the Christmas run-in we’d hoped for. But it looks like short-term angst,” Hundal said

On Dec. 19, approximately $1.02 billion was liquidated from the crypto market within 24 hours, of which around $856.66 million was long positions, according to CoinGlass data

Over the same period, Bitcoin (BTC) fell 3.36%, back down below the $100,000 psychological level. At the time of publication, Bitcoin is trading at $97,350, according to data from CoinMarketCap.

Bitcoin is trading at $97,350 at the time of publication. Source: CoinMarketCap

This isn’t the first time this month that Bitcoin’s drop below $100,000 has wiped out a significant amount of long positions

On Dec. 5, Cointelegraph reported that a sudden 5.47% dip in Bitcoin’s price below $93,000 wiped out $300 million within minutes. More recently, on Dec. 10, a sudden crypto market drawdown wiped out more than $1.7 billion in leveraged positions over a 24-hour period

CoinGlass said it was the biggest long liquidation of this cycle so far.

$856.66 in long positions was liquidated from the crypto market over the past 24 hours. Source: CoinGlass

Commenting on the recent liquidations, Bitcoin maxi Fred Krueger said in a Dec. 19 X post the only way to “screw” up trading Bitcoin is through leverage.

However, Hundal remains optimistic that a “Santa rally” is still on the cards, something that the market has been expecting, while Real Vision chief crypto analyst Jamie Coutts said in a Dec. 20 X post that a buying opportunity could be incoming.

Crypto analyst Caleb Franzen described the volatility as typical behavior during a bull run, and there’s no cause for concern.

Franzen said in a Dec. 19 X post that there were nine Bitcoin pullbacks during the last bull run over 16 months, all of which were followed by higher highs.

“Buckle up, buttercup,” he added.

Market to price in Trump expectations

Meanwhile, Hundal says he now expects the crypto market to price in its expectations for the Trump administration from here on out.

Related: Bitcoin tumbles will be ‘less abrupt’ after realized profit drops 76%

Trump’s inauguration as the 47th president of the United States is set for Jan. 20, 2025. Crypto market spectators are eagerly awaiting his plans for a US Bitcoin strategic reserve.

“One side of the market is going to be on the wrong side of that bet, so I’d expect to see some volatility when the new administration comes in and the direction becomes a little clearer,” Hundal added.

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This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.