The Day of Reckoning
December 13 will go down in cryptocurrency lore as a ‘bloody Monday.’ The Bitcoin price, once comfortably sitting above $47,000, took a nosedive, sowing chaos among altcoins that plummeted by up to 25% in the blink of an eye. Investors who thought they were riding high might have felt their stomachs drop just as quickly as their portfolios.
Why the Sudden Drop?
Analysts pointed fingers at the looming Federal Open Market Committee (FOMC) meeting, set for December 15. The speculation here is as thick as grandma’s gravy—folks are concerned that the Federal Reserve might start tapering its bond repurchasing program, which translates to investors feeling the jitters. FOMO is one thing, but panic selling? That’s jumping off a cliff with both feet!
Bitcoin Struggles But Still Shines
By December 13, Bitcoin’s price had retraced by 8.2% over the past week, but let’s give credit where it’s due—it still did better than the wider altcoin market. Just two weeks earlier, Bitcoin boasted a solid 67% gain for the year. Perhaps investors were just being prudent, collecting their winnings before the big, scary meeting.
Tether’s Tug-of-War
Just when we thought it couldn’t get crazier, let’s talk Tether. On December 13, its discount bottomed at 4%, hinting at some selling shenanigans. For the uninitiated, a 5% discount usually signals heavy selling activity. This time, however, it screamed ‘slightly bearish’ rather than ‘run for the hills!’
Liquidation Levels: Not as Catastrophic as Expected
Across the board, liquidations totaled about $400 million, a blip when compared to the $2.1 billion sold off just days prior on December 3. This was like a mere gust of wind against a backdrop of a storm. Only $300 million in long contracts met the liquidation axe due to insufficient margin. Sounds like one of those times when your friend pays for the pizza but gets too many toppings!
The Calm After the Storm
Despite the volatility, the overall market structure held its ground quite nicely. The perpetual futures contracts haven’t flipped into outright bearish territory, as we saw no clamoring for shorts betting on a severe price drop. For now, a funding rate around 0.05% shows that long-term optimism might still linger in dark corners, waiting for the FOMC meeting to blow over.
The bottom line? As Tether dances at a 4% discount and liquidation figures remain low, let’s not declare doom and gloom just yet. Unless something drastic shifts in the fundamental landscape, Bitcoin isn’t rushing towards $42,000 anytime soon.
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