Bitcoin: Collapse Below $42,000, Liquidations Accelerate

The crypto market is experiencing turbulence at the end of 2023. Bitcoin has seen its price drop below the symbolic threshold of $42,000, under selling pressure. The increased volatility also leads to a rise in liquidations of leveraged positions. Amidst this turmoil, investors are wondering what 2024 holds for the sector.

Bitcoin Falls Below $42,000 Due to Selling Pressure

This latest Bitcoin slide follows a period of intense volatility. In just 24 hours, its price has dropped by more than 3%, reaching $41,998 on Wednesday, December 27, according to Block’s data.

This plunge is partly the result of an increase in short selling by short-term Bitcoin holders, who are adopting essentially speculative behavior.

At the same time, the number of transactions confirmed on the Bitcoin blockchain has reached historic highs, exceeding 633,000 per day. The daily trading volume in Bitcoin is now close to $28 billion, nearly double the levels observed in October and November.

These fluctuations have caused the liquidation of more than $44 million in leveraged trading positions over the last 24 hours, primarily short positions amounting to $38 million.

Feverish Anticipation for Spot Bitcoin ETFs

Despite this downturn, the turbulence should not overshadow Bitcoin’s excellent results throughout 2023: +155% since January. Especially, many experts maintaining a measured optimism for 2024.

This enthusiasm is based in particular on the highly anticipated approval, in the first quarter of 2024, of the first ETFs pegged to the Bitcoin price by the SEC, the US financial regulator. A crucial step to attract institutional investors and simplify individual access to Bitcoin.

Admittedly, these approvals would only boost the prices temporarily, according to Andre Dragosch from ETC Group. But the gradual influx of new capital could potentially double Bitcoin’s price by the end of 2024. An encouraging prediction that offers a glimpse of a radiant future for the crypto star.