Bitcoin's Sudden Drop to $93K Triggers $303M in Liquidations

On December 5, Bitcoin experienced a sudden price dip that sent shockwaves through the market, wiping out over $300 million in long position liquidations within minutes. The cryptocurrency's price dropped by 5.47%, briefly falling below $93,000 before quickly rebounding.
Rapid Price Decline
Between 10:23 AM UTC and 10:28 AM UTC, Bitcoin (BTC) plummeted from $98,338 to $92,957. This abrupt decline triggered massive liquidations, with over $303.48 million in long positions being wiped out in just an hour. The total liquidation volume for the day soared to $404 million, according to data from CoinGlass.
However, Bitcoin's price quickly rebounded to $96,410, as of the latest data from TradingView.
Market Reactions
Felix Hartmann, founder of Hartmann Capital, speculated that the sudden price drop could mark the end of the "flush" in the market, suggesting there’s a 70% chance the worst is over, but a 30% chance of further declines. Hartmann noted that most of the leverage in Bitcoin had been cleared out, and any further drops would likely be due to traders being spooked into taking profits.
“This wipe cleared out most of the lever on BTC. Only reason we go lower is if it spooked enough people into taking profit,” Hartmann shared in a December 5
A Historic Plunge
The speed and magnitude of the decline were noteworthy, with pseudonymous crypto trader Smiley Capital calling the event “historic.” In a post on X, Smiley Capital pointed out that Bitcoin’s price dropped nearly 10% in just three minutes, which equated to a staggering $200 billion loss in market capitalization.
“180 seconds. 200 billion dollars lower,” Smiley Capital wrote, emphasizing the sheer scale of the price move.
At the time of publication, Bitcoin's market capitalization stood at $1.92 trillion, following its recent all-time high of $104,000 per coin, set just a day prior. Despite the sharp dip, Bitcoin had previously broken the $100,000 mark for the first time, marking a significant milestone for cryptocurrency.
Short-Term Consolidation
While the sudden retracement has raised concerns, some market analysts believe it could signal a period of consolidation rather than the end of Bitcoin's bull run. IG Markets analyst Tony Sycamore indicated that the sharp pullback might be a sign that Bitcoin is entering a consolidation phase.
"While we don’t see this as the end of the Bitcoin bull run, it does signal we are entering a consolidation phase in the days/weeks ahead," Sycamore said in a December 5 post on X.
This retracement mirrors the consolidation period that followed Bitcoin's previous all-time high of $73,679 in March 2024. After reaching that peak, Bitcoin traded within a range between $53,000 and $72,000 for the next several months.
Ongoing Bullish Sentiment
Despite the brief dip, Bitcoin remains on a strong upward trajectory. Cointelegraph reported that, in 2024, more than $31 billion in net inflows were recorded from spot Bitcoin exchange-traded funds (ETFs) in the United States. Additionally, Bitcoin’s fourth halving in April has further tightened the supply, contributing to the asset's bullish momentum.
While the market has experienced some turbulence, analysts remain optimistic about Bitcoin’s long-term potential, with many expecting further gains in the future.
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