Bitcoin plummeted by nearly $6,000 overnight, more than 60,000 people were liquidated and 6.3 billion yuan was wiped out

Source: Jinshi Data

Bitcoin once again saw a crazy run over the past weekend.

Since Bitcoin fell below $40,000 per coin in the early hours of Saturday (January 9), it has frequently experienced sharp rises and falls, with bulls and bears fighting fiercely over the $40,000 mark. On the evening of the 10th, it staged a cliff-like plunge, diving nearly $1,000 several times, and at the same time rising sharply several times.

As of 4:30 a.m. on the 11th, Bitcoin plunged nearly $6,000 in the day, hitting a low of $34,322 per coin. In the following minutes, Bitcoin rose by more than $1,500 in the short term, and rebounded to around $38,000 per coin by press time, narrowing the daily decline to 5.5%.

Other cryptocurrencies also continued to fall, with Ethereum falling nearly 10% to below $1,160 per coin.

The real-time liquidation data of the entire network's cryptocurrencies is available. In the past hour (as of 04:37 on January 11), the liquidation volume of the entire network's cryptocurrencies reached US$314 million, and the liquidation volume in the past 24 hours reached US$969 million.

Bitcoin rose by more than $10,000 last week, approaching the $42,000 mark. There are signs that Google's search interest in "Bitcoin" rose sharply at the beginning of this month, and retail investors' demand for cryptocurrencies rose sharply due to the "fear of missing out", leading to a surge in trading activities on cryptocurrency exchanges such as Coinbase and Binance, making the platforms prone to technical problems.

During this weekend's market turmoil, the world's largest cryptocurrency Coinbase was also offline for the second time in three days.

Zero Hedge found that when Bitcoin fell to $35,000, there was a buying on dip phenomenon.

$35,000-38,000 is also the concentration level of the strike price of option open contracts. Therefore, according to the current level of Bitcoin, the market may continue to buy on dips.

But it is worth noting that the world's largest Bitcoin currency trading fund, Grayscale Bitcoin Trust, has seen a rare large outflow of funds in recent times.

JPMorgan Chase warned that if the amount of funds flowing into the Grayscale Trust slows down significantly, the probability of a Bitcoin pullback will increase significantly, and a sharp pullback similar to that in 2019 will be inevitable.

As Bitcoin soared, the assets managed by Grayscale Trust have climbed from $2 billion at the beginning of December last year to $13.1 billion now. The current scale of funds flowing into the fund is about $1 billion per month.

In a weekend report, Bank of America described Bitcoin as the “mother of all asset bubbles” in the world in recent decades. Michael Hartnett, an analyst at the bank, wrote in the report:

“Bitcoin has risen 180% in the past two months, and the market value of the entire digital currency market has exceeded $1 trillion. If we visualize the bubbles in recent decades, Bitcoin is undoubtedly the ‘mother of bubbles.’”

Hannett also warned Bitcoin investors to be aware of several risks that could cause liquidity to dry up:

First, we should pay attention to the bearish market risks hidden in interest rate changes;

Second, be wary of an unexpected strengthening of the U.S. dollar;

Third, be careful of inflation exceeding expectations;

Fourth, we must prevent the market bubble from becoming too large and scaring away speculative funds.