The cryptocurrency industry registered heightened volatility in the past 24 hours as Bitcoin (BTC) price dropped more than 6 percent in the past 24 hours to reach a daily range low of about $94,725. The altcoin sector was heavily impacted by the sudden Bitcoin drop, with the TOTAL2 shedding more than 15 percent, which represents over $258 billion.
As a result, the total crypto market cap slipped over 7 percent to hover around $3.58 trillion on Tuesday, December 10 during the early Asian session. Nonetheless, there were a few outliers of altcoins that registered notable gains in the past 24 hours led by Baby Doge Coin ($BABYDOGE), and Movement (MOVE).
Major Factors that Contributed to Crypto Selloff Today
Quantum Bitcoin FUD
On Monday, tech giant Google announced the launch of Willow, a next-generation quantum chip. According to the company, Willow can perform in under five minutes a benchmark computation that would take one of today’s fastest supercomputers 10 septillion years, a figure that exceeds the known age of the universe.
While the announcement was huge for the technology sector, it was a huge shakeout for the entire cryptocurrency industry, more so Bitcoin (BTC). Moreover, Bitcoin’s cryptography relies on difficulty adjustment, which is often more than 5 minutes, thus potentially giving Google’s Willow quantum chip a theoretical advantage.
However, experts believe that Bitcoin can simply adapt to a quantum computer attack through necessary difficulty adjustments and security upgrades.
Retrace of Bitcoin Countries
On Monday, the on-data analysis revealed that the Royal Government of Bhutan transferred 406 Bitcoins to QCP Capital, worth around $40 million. As a major holder of Bitcoin, with a balance of over 11k, the Royal Government of Bhutan will remain a major potential threat to bullish sentiment.
Meanwhile, a report emerged that El Salvador could ease its Bitcoin adoption agenda in the country to strike a deal with the IMF on a $1.3 billion loan.
Leveraged and Futures Market Cool-off
The cryptocurrency market also experienced heightened selling pressure amid heightened liquidations in the leveraged sector. According to the latest market data, more than 582k traders were liquidated in the past 24 hours, with the total liquidations at over $1.7 billion.
Notably, more than $1.5 billion involved long traders, thus triggering a more rejuvenated long squeeze as more traders attempted to catch the falling wave. Meanwhile, the total crypto open interest (OI) dropped from over $138 billion to hover around $123 billion at the time of this writing.
On the Flipside
Despite the sudden crypto selloff, institutional investors continued with the previous Bitcoin accumulation cycle. The total supply of Bitcoin on centralized exchanges dropped by over 10k to hover about 2.25 million.
BlackRock’s IBIT led the US spot Bitcoin ETF issuers in BTC accumulation, signaling a potential major rebound and bullish continuation in the near term.
