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<p>Bitcoin, the world’s largest cryptocurrency, experienced a sudden and sharp decline in December, wiping out nearly a week’s worth of gains. In a mere 20 minutes, the price of <a href="https://www.cryptopolitan.com/crypto-analyst-on-bitcoin-chart/" rel="noopener noreferrer nofollow">Bitcoin</a> plummeted by 6.5%, falling from $43,357 to a low of $40,659, before showing some signs of recovery.</p>
<p>The unexpected drop in Bitcoin’s value had a ripple effect across the cryptocurrency market. Ether, the second-largest cryptocurrency by market capitalization, also experienced a significant decline of more than 8.9% during the same timeframe. At the time of reporting, Ether was trading at $2,233, marking a 5.3% decrease for the day.</p>
<p>Other major cryptocurrencies, including Binance Coin (BNB), XRP, and Solana, followed suit, posting losses in the wake of Bitcoin’s rapid price decline.</p>
<h2 class="wp-block-heading" id="liquidations-and-losses">Liquidations and losses</h2>
<p>Data <a href="https://twitter.com/scottmelker/status/1734016667418554548" rel="noopener noreferrer nofollow" target="_blank">revealed</a> that the sudden drop in Bitcoin’s price led to the liquidation of more than $270 million worth of long positions. Additionally, this decline resulted in the obliteration of approximately $1.2 billion in open interest on Bitcoin, which currently hovers around $17.9 billion.</p>
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   <p lang="en" dir="ltr"><a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow" target="_blank">#Bitcoin</a> just closed it's 8th green weekly candle in a row.<br><br>This week's candle was a monster.<br><br>When correction, sir? <a href="https://t.co/xxWjTxxLLr" rel="noopener noreferrer nofollow" target="_blank">pic.twitter.com/xxWjTxxLLr</a></p>— The Wolf Of All Streets (@scottmelker) <a href="https://twitter.com/scottmelker/status/1734016667418554548?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow" target="_blank">December 11, 2023</a>
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<p>This dramatic drawdown marks the most substantial single-day decline for Bitcoin in over a month, even though the cryptocurrency had witnessed a growth of over 12% in the previous 30 days.</p>
<h2 class="wp-block-heading" id="bitcoin-s-2023-rally-and-market-expectations">Bitcoin’s 2023 rally and market expectations</h2>
<p>Despite the recent setback, Bitcoin has enjoyed a remarkable rally in 2023, surging by more than 150% since the beginning of the year. This upward trajectory has been predominantly attributed to the anticipation that the United States Securities and Exchange Commission (SEC) will approve several spot Bitcoin exchange-traded funds (ETFs).&nbsp;</p>
<p>Such approval would grant large institutional investors significant exposure to the cryptocurrency, a development highly anticipated by the market.</p>
<p>Another contributing factor to Bitcoin’s rally is the prevailing expectation in the wider financial market that the U.S. Federal Reserve will commence reducing interest rates by mid-2024. Investors have been closely monitoring this anticipation, which has influenced their investment decisions.</p>
<p>Market participants are also preparing for the release of the next round of inflation data and the final Federal Open Market Committee (FOMC) meeting of 2023. Most analysts are anticipating improvements in core inflation metrics and are speculating that the Federal Reserve will maintain its current interest rate levels.</p>
<p>Bitcoin experienced a sudden and sharp decline, erasing nearly a week’s worth of gains in a matter of minutes. This unexpected drop had a cascading effect on the wider cryptocurrency market, with other major cryptocurrencies also posting losses. The liquidation of long positions and the loss of open interest added to the market turmoil.</p>
<p>Despite this setback, Bitcoin has shown significant growth in 2023, largely driven by the anticipation of SEC approval for spot Bitcoin ETFs and the expectation of interest rate cuts by the Federal Reserve in the coming years. As the market navigates these developments and awaits further economic data, investors continue to closely monitor the cryptocurrency landscape, seeking opportunities amid the volatility.</p>

Crypto market shaken as Bitcoin plunges 6.5% in a 20-minute flash crash

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