The cryptocurrency market has experienced another sharp decline.
On December 4, midday trading data revealed Bitcoin briefly falling below $42,000**, marking a **24-hour drop of over 20%**, with a low of **$41,967. Ethereum also plunged under $3,500, down 21% in the same period.
Market Turbulence Highlights:
- 1-hour liquidation: $1.13 billion (total across contracts)
- 24-hour liquidation: $2.23 billion
December’s Downward Trend
The crypto market downturn began earlier this month:
- December 1: Bitcoin peaked near **$59,000**, approaching its $60,000 resistance level.
- December 3: Bitcoin dropped 12% ($5,000), testing the **$51,600** support.
- December 4: The sell-off intensified, with Bitcoin breaking below $50,000** and briefly spiking downward to **$42,000—a $10,000 intraday crash and its lowest price since September 30.
Context and Catalysts
- November’s all-time high: Bitcoin reached $69,000**, pushing the total crypto market cap toward **$3 trillion. However, failure to breach $70,000 signaled weakening momentum.
- Ethereum’s performance: The second-largest cryptocurrency mirrored Bitcoin’s drop but with less volatility, trading 20% below its $4,898 peak.
Macroeconomic Parallels
The crypto slump aligns with global stock markets:
December 4 equities decline:
- NASDAQ: -2%
- Dow Jones: -0.17%
- S&P 500: -0.84%
- Gold’s rise: Spot prices increased ~1%.
Regulatory Impact
- Huobi’s China exit: The exchange notified mainland users to clear assets by December 14, with full withdrawal halts by year-end.
- El Salvador’s response: President Nayib Bukele announced buying 150 Bitcoin at an average of $48,670 during the dip.
FAQs
Why did Bitcoin drop so suddenly?
The sell-off reflects profit-taking after November’s peak, compounded by broader market declines and regulatory pressures (e.g., China’s crypto bans).
How does Ethereum’s drop compare to Bitcoin’s?
Ethereum fell 21% but with lower volatility, as its utility in decentralized finance (DeFi) provides some resilience.
What’s next for Bitcoin’s price?
Short-term volatility is likely, but institutional adoption (like El Salvador’s purchases) may stabilize prices long-term.