U.Today – Market Eruption on Dec. 9

The broader digital currency ecosystem was stunned on Dec. 9 when the market shed nearly $2 billion in combined crypto liquidations. To help clarify the situation, crypto analyst Ash Crypto on X outlined the events that led to the most significant sell-off since 2021.

Crypto Liquidations Started on Coinbase

According to analysts, the sell-off began on Coinbase as traders started selling about an hour before the major downturn. This selling pressure triggered a "liquidation like a domino."

Once the market entered a critical liquidation zone, it was game over, as stop losses were activated in a chain reaction. The overheated market saw funding fees surge, with Open Interest (OI) also increasing as traders took new positions.

After this sharp sell-off, strong buying pressure returned on Ethereum, with traders viewing ETH as a safer bet due to its smaller drawdown compared to Bitcoin. Meanwhile, XRP's price plummeted by over 12%, reaching as low as $2.06 in the extensive sell-off.

The analyst noted that XRP still has thin liquidity, which affects its potential for recovery. Amidst the sell-off, Cardano (ADA), USDC, and FDUSD saw significant boosts in volume.

What Now?

The market is already recovering from the unexpected downturn. Bitcoin's price was trading at $97,658, down by only 0.68% in 24 hours. Many altcoins, including Solana (SOL) and Binance Coin (BNB), have also rebounded from their drastic declines.

Ash Crypto stated that the liquidation likely eliminated "weak hands" and allowed "smart money" to purchase the dip at a discount. He projected that the coin's price is likely to "snap back quickly."

The market still possesses the key factors that contributed to its growth over the past few weeks. MicroStrategy made a significant $2.1 billion Bitcoin purchase recently, demonstrating a robust institutional presence in the market.

Experts are anticipating a fast recovery for the market, with Robert Kiyosaki encouraging people to buy Bitcoin now.

This article was originally published on U.Today.