$1.6B in longs liquidated as altcoins crash

The cryptocurrency market faced a sharp downturn on December 9, 2024, with significant losses across major tokens and altcoins. Bitcoin dropped over 6% in value, reaching a low of $94,725. The total cryptocurrency market capitalization fell by 7%, settling around $3.58 trillion during the early hours of December 10 in Asia.

Market Overview

The altcoin market, measured by TOTAL2, recorded a loss of more than 15%, wiping out over $258 billion in value. Ethereum fell 7% to $3,686, while Bitcoin dropped below the $100,000 psychological level to $96,652. Despite the overall slump, outlier tokens such as Baby DogeCoin ($BABYDOGE) and Movement (MOVE) managed to post gains.

The market also experienced its highest liquidation event in over a year. Data from CoinGlass revealed that $1.7 billion was liquidated in 24 hours, with $1.53 billion coming from long positions. Small-cap cryptocurrencies led the liquidations, accounting for $564 million of the total.

Factors Driving the Selloff

Quantum Computing Concerns

Google’s announcement of its next-generation quantum chip, Willow, introduced uncertainty in the crypto space. The chip’s ability to perform computations in under five minutes raised concerns about Bitcoin’s cryptographic security, which relies on longer difficulty adjustments.

While quantum computing poses a theoretical risk, experts noted that Bitcoin could adapt through difficulty adjustments and security upgrades.

Institutional Bitcoin Movements

The Royal Government of Bhutan transferred 406 Bitcoin (worth $40 million) to QCP Capital, sparking concerns about large-scale selloffs. Bhutan holds over 11,000 Bitcoin, making it a key player in market dynamics.

Simultaneously, reports suggested El Salvador might scale back its Bitcoin adoption plans to secure a $1.3 billion loan from the International Monetary Fund (IMF), adding to bearish sentiment.

Liquidation Pressure

The leveraged trading market amplified the downturn. Over 582,000 traders were liquidated in the past 24 hours, with total liquidations exceeding $1.7 billion. Long positions accounted for $1.5 billion of these liquidations, creating a cascading effect as traders attempted to catch the falling prices.

Binance recorded the largest liquidations, totaling $739 million, followed by OKX and Bybit at $422 million and $369 million, respectively. The largest single liquidation occurred on Binance’s Ethereum-USDT pair, amounting to $19.69 million.

Broader Implications

The crypto market’s volume surged by 113% to $313 billion during the downturn, highlighting the intensity of trading activity. The market’s sharp reaction underscores the fragile sentiment amid technological developments and institutional shifts.

While concerns over quantum computing remain speculative, the need for adaptive cryptographic security and decentralized resilience is evident. As institutional movements and liquidation events continue to influence the market, traders must navigate heightened risks in an increasingly volatile environment.

Looking Ahead

The market awaits further updates on Bitcoin’s adaptability to quantum threats and how major holders like Bhutan and El Salvador will shape the asset’s trajectory. As the crypto space evolves, innovation and regulatory clarity will play critical roles in stabilizing market confidence.