Bitcoin Recovers From Leverage-Induced Flash Crash Below $93,000

Bitcoin prices fell to $92,980 in late trading on December 5. The move follows an all-time high earlier in the day, when the asset fell below $104,000 on Coinbase.

The 10% drop wiped around $10,000 off the price of BTC as another leverage-induced liquidation event occurred.

BREAKING: #Bitcoin briefly drops -$8,000 in 90 minutes to a daily low of $92,000.

Bitcoin has since recovered +$5,000 from its low, but continues to trade with volatility. pic.twitter.com/7hqeSQl1LW

— Kobeissi Letter (@KobeissiLetter) December 5, 2024

BTC Flash Crash

The five-figure return came as mainstream media around the world first reported Bitcoin’s milestone above $100,000.

“An interesting postmortem on this move is that ETFs didn’t follow it at all,” observed analyst ‘lowstrife’ who added:

“This was completely a spot move in bitcoin driven by, you guessed it, leverage.”

“If that’s what a couple of degens can do in Asia, what would Saylor do to the market if (when?) he has to liquidate his coins to pay the loan obligations? This is much bigger than that,” he said.

Bitcoin pioneer Adam Back noted that there was “very little market making” before adding: “Even a few minutes of a 4% gap between IBIT and spot BTC, wow!”

An interesting post-mortem about this move is that ETFs didn’t follow it at all. This was entirely a spot move in bitcoin driven by, you guessed it, leverage. pic.twitter.com/nSIFpXMsbW

— lowstrife (@lowstrife) December 5, 2024

According to Coinglass, 163,587 traders were liquidated in the last 24 hours, and the total value destroyed exceeded $900 million, 80% of them long positions.

“Towards the end of the week, a strong pullback wiped out a wave of leverage, other currencies did not follow suit, and the long side of the crypto market in general is very strong,” commented the derivatives provider cryptographic Greeks Live.

The decline and correction have returned the asset to its limited channel, where it has been trading since mid-November.

At the time of writing, during early trading in Asia on Friday morning, BTC was changing hands at around $97,600.

Bitcoin ETFs remain bullish

As noted earlier, spot Bitcoin ETFs didn’t blink as spot markets were stripped of their leverage.

The 11 spot Bitcoin ETFs in the US saw solid momentum, with an aggregate inflow of $748 million on Thursday. The BlackRock IBIT fund led the pack with an inflow of $751.6 million, while Grayscale’s GBTC exited at $149 million, according to Coinglass.

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