The heavy crypto liquidations in the past 24 hours have cooled off the leveraged and futures open interest markets, thus setting a new precedent for bullish sentiment.
The crypto industry registered heightened volatility in the past 24 hours after Bitcoin price BTC $84 539 24h volatility: 0.0% Market cap: $1.68 T Vol. 24h: $16.54 B slipped to reach a daily low of about $94,725. The total crypto market dropped more than 6% in the past 24 hours to hover at around $3.6 trillion on Tuesday, December 10, during the mid-London session.
Consequently, the crypto industry registered the highest liquidation in the recent past of around $1.8 billion. More than $1.5 billion of the crypto liquidations involved long traders, with the largest single liquidation order happening on the Binance exchange involving ETH/USDT valued at nearly $20 million.
Major Reasons Why Crypto Liquidations Topped $1.8B Today
The cryptocurrency industry experienced panic sellers in the past 24 hours following a string of major negative news. On the top list, Google announced the launch of its latest quantum innovation dubbed Willow, a revolutionary chip that reportedly can solve tasks in less than 5 minutes which would take today’s fastest supercomputer 10 septillion years.
The announcement was a huge bombshell to the Bitcoin community, as some speculations on the potential implication of BTC SHA-256 security increased. However, Charles Edwards, the founder of Capriole Investment, noted that the threat of quantum computing on Bitcoin will only become real in about 5-10 years.
As a result, Edwards highlighted that Bitcoin’s core developers must factor in network updates that will ensure BTC survives a quantum attack.
“It’s good everyone is talking about Quantum Computing today, perhaps it will finally start to be taken seriously. If you want to enjoy Bitcoin for decades to come, we should be on the front foot of QC now,” Edward’s noted.
The crypto industry also experienced short-term fear as the governments of El Salvador and Bhutan signaled a potential slowdown on their Bitcoin plan. However, the United States is en route to passing strategic Bitcoin reserve legislation, which could influence other nations, including Russia.
What’s Next?
Following the heightened crypto liquidations in the past few days, increased fresh capital could fuel bullish sentiment ahead. Furthermore, the IS spot Bitcoin ETFs registered a net cash inflow of around $479 million led by BlackRock’s IBIT and Fidelity’s FBTC.
Additionally, the spot Ether ETFs registered a net cash inflow of over $149 million, thus bringing the cumulative total net inflow to about $1.56 billion. As Coinspeaker noted, digital assets investment products registered the largest weekly cash inflow of over 3.8 billion during the first week of December.
With the supply of Bitcoin on centralized exchanges at a multi-year low of about 2.25 million, a fresh bullish cycle is imminent in the near term.
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