The Bitcoin [BTC] price fell 5.59% in 4 hours on the 17th of December, after the S&P 500 and the Nasdaq sank to a 3-week low. The losses tech stocks endured were the primary reason, as worries about the sustainability and return on spending in the AI trade resurfaced.
The U.S. Federal Reserve has hinted that it could pause interest rate cuts next month, which has also discouraged risk-taking.
Oracle Corporation shed 5.4% after a report that the cloud company’s negotiations with its largest data center partner, Blue Owl Capital, stalled on a $10 billion project.
The Asian markets tracked these losses, with the Nikkei 225 down 1% and the KOSPI 1.53% in red. The Bitcoin price, which tested the local $85.7k support, has bounced higher by 1.58% in 12 hours to trade at $87k at press time.
The impact of the Bitcoin price volatility
In a post on X, the Kobeissi Letter observed that the Bitcoin price swing represented a $140 billion market cap swing in under 2 hours. CoinGlass data showed that Bitcoin saw a $158 million liquidation wipeout in the past 24 hours, as of writing.
This nearly matched the $184 million worth of liquidations Bitcoin saw on Tuesday. Back then, the Asian markets posted losses, and the Bitcoin price had seen a bearish swing to force sizable liquidations.
In total, the crypto market saw $543 million in liquidations today, and $165 million for Ethereum [ETH].
AMBCrypto had observed in the same report that leverage was rising despite the lack of market momentum, setting up volatile conditions.
What next for BTC?
Source: BTC/USDT on TradingView
The 4-hour chart showed a bearish structure break on the 15th of December. This drop also left a sizable imbalance (white box) and a lower high at $90k.
Wednesday’s Bitcoin price volatility saw this imbalance tested, the local high swept, and a bearish drop back to the $85.7k local support.
Source: CoinGlass
The liquidation heatmap showed a magnetic zone at $94.5k. This cluster of short liquidation levels presented an attractive target, as prices gravitate towards liquidity.
On the other hand, the $82k-$83k pocket was closer and could be visited before any upward move.
Traders should also be prepared for a bearish continuation to the $74k liquidity pocket, due to a lack of demand.
Final Thoughts
- The Wall Street tech sector showed weakness and worried investors, which the Asian markets and Bitcoin reflected.
- Traders and investors should be prepared for further BTC drawdown.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion