Bitcoin Dips Below $81.5K, Ethereum Falls Under $2,425 Amid $770M Liquidations

Crypto Market Sees Significant Pullback, Bitcoin Drops Below $81.5K

The cryptocurrency market experienced a notable downturn on December 13th, with Bitcoin falling below the $81,500 mark. The digital asset saw a 2.9% decline in the past 24 hours, trading at $81,510. Ethereum also slipped below $2,425, experiencing a steeper drop of 4.8%. Solana (SOL) and XRP (XRP) followed suit, with both cryptocurrencies plummeting between 6% and 7%.

The broad market correction led to over $770 million in liquidations across crypto derivatives markets, predominantly affecting long positions which accounted for $685 million of the total. This indicates a significant unwinding of leveraged bets on price increases, signaling a cooling of market sentiment from the “greed” territory.

Liquidation Surge Highlights Leveraged Position Unwinding

Data from CoinGlass revealed that as of 9 AM on December 13th, total 24-hour liquidations reached $770 million. The overwhelming majority, $685 million, comprised long positions, while short positions accounted for only $85 million. This stark imbalance underscores the heavy impact on bullish leveraged positions during the current pullback.

Bitcoin has been on a downward trend since reaching a high of $86,790 on October 2nd, accumulating a decline of over 6% in the past two weeks. Ethereum has also retreated from its peak of $2,754. Both major cryptocurrencies have broken key psychological levels this week, triggering a cascade of liquidations.

Broader Market Influences and Risk-Off Sentiment

The downturn in the crypto market appears to be influenced by broader financial market trends. U.S. stocks closed mixed on Monday, December 12th, with the S&P 500 down 0.09% and the Nasdaq Composite falling 0.49%, while the Dow Jones Industrial Average rose 0.34%. This divergence saw capital shift away from large-cap tech stocks towards industrial and financial sectors.

Concurrently, a strengthening U.S. dollar and elevated U.S. Treasury yields have continued to suppress risk assets. In the absence of significant new buying interest, cryptocurrencies have mirrored the correction seen in U.S. tech stocks.

Altcoins Suffer Deeper Losses Amidst Risk Aversion

Major altcoins experienced substantial declines. Solana was trading at $103.18, down 7.6% in the last 24 hours and briefly touching a low of $101.69. XRP was priced at $1.3233, a 6.2% decrease. The current sell-off has disproportionately affected high-beta cryptocurrencies, indicating a clear contraction in market risk appetite and a continued withdrawal from leveraged and speculative positions.

Technical Indicators Suggest Weakening Momentum

On a daily candlestick basis, Bitcoin closed at $81,850. Its 14-day Relative Strength Index (RSI) stands at 47.2, placing it in neutral territory. The moving average arrangement shows the closing price below the 20-day Simple Moving Average (SMA20) at $84,046, but above the 50-day SMA (SMA50) at $81,047 and the 200-day SMA (SMA200) at $72,083. The Moving Average Convergence Divergence (MACD) is in bearish territory, with its histogram widening compared to the previous day, suggesting continued weakening momentum.

Immediate overhead resistance levels for Bitcoin are at the SMA20 ($84,046), the upper Bollinger Band ($86,404), and the 30-day high ($87,396). Downside support is found at the lower Bollinger Band ($81,688), the SMA50 ($81,047), and the 30-day low ($74,968). The current closing price is hovering near the lower Bollinger Band, indicating a potential battleground in this zone in the short term.

Ethereum closed at $2,447. Its 14-day RSI is at 37.6, indicating a weaker position. The closing price is below the SMA20 ($2,636) and SMA50 ($2,556), but above the SMA200 ($2,137). The MACD is also in bearish alignment with an expanding histogram, further signaling weakening momentum.

Key resistance for Ethereum includes the lower Bollinger Band ($2,456), the SMA50 ($2,556), and the SMA20 ($2,636). Downside support is located at the 30-day low ($2,359) and the SMA200 ($2,137).

Fear and Greed Index Cools, Market Shifts Towards Neutral

The Fear and Greed Index registered 57 on December 13th, a significant drop from the previous day’s 69. Over the past eight days, the index has fluctuated between 57 and 73, suggesting a shift from the “greed” zone towards a more neutral market sentiment.

Bitcoin has retraced approximately 6% from its early October high. The ability of the cryptocurrency to reclaim the $84,000 level (SMA20 resistance) will be a key focus for bulls. Until pressures from the U.S. dollar and yields abate, risk appetite in the market is expected to remain cautious.