After rising above $100,000 for the first time on Thursday, Bitcoin’s price fell about 10 percent, nearly retesting the support level above $92,000. The flagship coin traded around $97,680 during the early Asian session on Friday, December 6, indicating that yesterday’s breakout above $100,000 was a fakeout.
Following Bitcoin’s sudden sell-off in the past 24 hours, more than $900 million was raised from the entire crypto market, mostly involving long traders. Bitcoin pairs were the most affected at around $498 million, of which $421 million were long traders.
Major Factors Behind the Sudden Bitcoin Crash Today
Cooling-off period for leverage
Bitcoin’s Open Interest (OI) rose to over $129 billion and volume of over $466 billion in the past 24 hours, signaling increased investor demand. In the past 24 hours, Tether has printed $1 billion on Ethereum, but Bitcoin’s collapse was inevitable as trading volume remained low relative to the social media hype.
Consequently, Bitcoin’s bull run needed a cooling off to attract more buyers and gain more fuel for a rally above $100,000.
Mixed reactions between whale investors and retailers
After yesterday’s Bitcoin pump, on-chain data shows that some whale investors have taken advantage of taking any profits. However, retailers continued to buy more in anticipation of further bullish trends.
For example, Meitu, a large pro-Bitcoin Chinese institutional company, revealed that they had sold all of their 948 BTC holdings in the past 24 hours.
After Bitcoin’s price drop, some whale investors rushed to buy more BTC coins in anticipation of a new bull run in the short term.
Acquisition of Altcoins
With the Bitcoin price falling below $100,000 after yesterday’s fakeout, the altcoin industry has gained more bullish momentum. The TOTAL2 market cap, excluding Bitcoin, rose more than 3 percent in the past 24 hours, hovering around $1.57 trillion at the time of writing.
Meanwhile, Bitcoin’s dominance fell 1 percent and hovered around 55 percent on Friday, signaling a notable shift toward the altcoin industry. Moreover, the price of Ethereum (ETH) has broken out of a major resistance level at around $3,800 and is heading towards its all-time high.
