Crypto carnage wipes out $1.5B as Bitcoin sinks to $94K

The cryptocurrency market saw significant disruption on Monday, shrinking by 6.31% in 24 hours and losing $1.5 billion in crypto derivatives positions.

Bitcoin (CRYPTO:BTC) spearheaded the downturn, plunging to $94,249 before attempting stabilisation between $96,800 and $97,000 per coin.

Bitcoin’s drop from $97,748 to $94,249 caused a domino effect, leading to sharp declines across other cryptocurrencies.

Ethereum (CRYPTO:ETH) fell by 7%, Ripple (CRYPTO:XRP) by more than 11%, and Solana (CRYPTO:SOL) by 6.5%.

Major assets like Binance Coin (CRYTO:BNB) and Dogecoin (CRYPTO:DOGE) also suffered losses of 7.48% and 8.92%, respectively.

Smaller altcoins bore the brunt, with tokens like Peanut (CRYPTO:PNUT) and dYdX (CRYPTO:DYDX) falling 22% and 21%, while GALA (CRYPTO:GALA) dropped over 20%.

The derivatives market faced massive liquidations totaling $1.51 billion, predominantly from long positions.

Data from Coinglass shows 514,384 traders were affected, with nearly two-thirds of the liquidations hitting altcoins.

Notably, $1.38 billion of the liquidated positions were long bets, underscoring the risks of high leverage in volatile markets.

This episode highlights the fragility of crypto valuations, where rapid price fluctuations can wipe out gains and exacerbate losses.

The downturn serves as a reminder for traders to employ risk management strategies, especially in high-volatility environments.

The sell-off underlines the speculative nature of the market, where over-enthusiasm can lead to severe corrections.

By 4:45 p.m. EDT on Dec. 9, Bitcoin recovered to $97,294, though it struggled to maintain the $97,000 level just minutes later.

The Altcoin Season Index (ASI) signaled a shift, dropping below 75 to 69, indicating that "altcoin season" had ended.

This sharp market correction raises concerns about the long-term stability of crypto valuations during bullish cycles.

Traders and investors are expected to adopt a more cautious stance, stressing risk mitigation over speculative ventures.

The volatility reminds participants of the need for balanced strategies in an unpredictable and rapidly shifting market.

At the time of reporting, Bitcoin price was $97,450.85.