The price of Bitcoin (BTC) briefly fell below $41,000 on Dec. 11 at 2:15 am UTC, following a sudden 6.5% drawdown from $43,357 to as low as $40,659 in a span of 20 minutes.
At the time of publication, Bitcoin was trading slightly up from the local low at $41,960, TradingView data shows.
In emailed comments to Cointelegraph, IG Markets Australia analyst Tony Sycamore said that following eight weeks of consistent gains, a sudden decline in BTC's price shouldn't come as a major surprise nor be a huge concern.
"It's also a healthy development as it removes some of the speculative excesses that have been building in recent weeks and provides the opportunity for some much-needed consolidation," Sycamore said.
"Bitcoin has a good layer of support between $40,000 and $37,500, and providing this support band holds, look for the uptrend to resume towards ~$50/$51k."
Ether (ETH), the second-largest cryptocurrency by market cap, also declined abruptly, falling more than 8.9% in the same time frame. The price of ETH has since stabilized and is trading for $2,233, down 5.3% on the day.
Other large-cap crypto assets, including BNB (BNB), XRP (XRP) and Solana (SOL), also posted losses.
According to data from CoinGlass, the brief drop caused more than $270 million worth of long positions to be liquidated. The decline also wiped out some $1.2 billion in open interest on BTC, which is currently sitting around $17.9 billion.
The drawdown, funnily, came only minutes after Wolf of All Street’s Scott Melker noted that Bitcoin had just closed its eight green weekly candle, adding the remark: “When correction, sir?”
#Bitcoin just closed it's 8th green weekly candle in a row.
— The Wolf Of All Streets (@scottmelker) December 11, 2023
This week's candle was a monster.
When correction, sir? pic.twitter.com/xxWjTxxLLr
The drawdown marks the largest single-day decline for Bitcoin in over a month, with the asset having grown more than 12% over the last 30 days.
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However, Bitcoin has rallied more than 150% since Jan. 1. The uptrend has been primarily driven by the expectation that the United States Securities and Exchange Commission will approve several spot Bitcoin exchange-traded funds (ETF), allowing large institutions to gain significant exposure to the asset for the first time.
Adding to Bitcoin’s rally has been the wider market expectation that the U.S. Federal Reserve will begin cutting interest rates mid-way through 2024.
Investors are also preparing for the next round of inflation data and the final Federal Open Market Committee meeting of 2023, with most analysts expecting improvements in core inflation and betting that the Fed will hold rates at the current level.
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Update (Dec. 12, 12:26am): This article has been updated to include commentary from IG Markets analyst Tony Sycamore.