Key Points
- Bitcoin’s value fell below $100,000, causing a market wipeout of $400 million.
- The dip in Bitcoin’s value has not deterred investors, as bullish sentiment remains.
Bitcoin’s value recently fell below the $100,000 mark, leading to a $400 million market wipeout. This happened after the cryptocurrency experienced a 3.94% surge in its daily value, which was later wiped off.
At the time of reporting, Bitcoin was trading at $97,785.84, marking a drop of 4.27%. Despite this drop, Bitcoin’s market cap remained at $1.93 trillion, with the cryptocurrency holding a 56.4% dominance.
Market Response
Despite the drop, the market is expected to bounce back, with potential retests of the $100K-$102K price zone. This is if Bitcoin rebounds from the minor support between $96,000 and $97,000.
Data from Coinglass shows that a significant $381.56 million was liquidated in the past 24 hours, with $331.20 million in longs and $50.36 million in shorts. In just four hours, over $240 million was wiped off from the market.
Investor Sentiment
Despite the market wipeout, the Crypto Market Fear and Greed Index indicates that investors remain bullish. This suggests that investors are looking to buy the dip and add more digital assets to their portfolios during this slight downturn.
Previously, Bitcoin was on track to reach $112,000 as investor demand rose. This was further boosted by the United States spot Bitcoin exchange-traded funds (ETFs) recording a significant $987.06 million on January 6th.
Reasons for the Crash
The crash came after the US Bureau of Labor Statistics reported an increase in JOLTS job openings by 259,000 to 8.09 million in November 2024. This robust labor market data suggests fewer Fed rate cuts in 2025 as economic conditions improve.
Additionally, the ISM Services Purchasing Managers’ Index (PMI), a monthly indicator of business activities in the US, was much better than expected. As a result, the US economy seems to be improving, which could further reduce the number of rate cuts that investors would see in 2025. Notably, rate cuts are very bullish for bitcoin because they make volatile and risky investment instruments more lucrative for retail and institutional investors.
