Late-Night Crash: Bitcoin Plunges Over 6%, Triggering $547 Million in Liquidations; Gold and Oil Also Suffer

Late-Night Crash: Bitcoin Plunges Over 6%, Triggering $547 Million in Liquidations; Gold and Oil Also SufferFrom the evening of November 25th to the early morning of November 26th (Beijing time), global financial markets experienced significant turbulence, with sharp declines across multiple asset classes. Bitcoin, after reaching a high of approximately $99,000 per coin, plummeted below the $93,000 mark, suffering a maximum drop of over 6%

Late-Night Crash: Bitcoin Plunges Over 6%, Triggering $547 Million in Liquidations; Gold and Oil Also Suffer

From the evening of November 25th to the early morning of November 26th (Beijing time), global financial markets experienced significant turbulence, with sharp declines across multiple asset classes. Bitcoin, after reaching a high of approximately $99,000 per coin, plummeted below the $93,000 mark, suffering a maximum drop of over 6%. This triggered a massive sell-off in the cryptocurrency market, resulting in over 170,000 liquidations totaling $547 million. The crash wasn't isolated; other cryptocurrencies also experienced declines, with Dogecoin falling over 9%, while Ethereum showed relative resilience.

The cryptocurrency market downturn also impacted related equities. MicroStrategy, a US-listed company that had previously purchased over 50,000 Bitcoins, saw its stock price plunge over 4% during the day, and the decline extended to approximately 4% in after-hours trading. MicroStrategy's stock price, which had previously soared over 100% alongside Bitcoin's rise, was directly impacted by the sharp correction in Bitcoin's price, highlighting the volatility of the cryptocurrency market's effect on related assets.

Wang Shengyu, a senior analyst at PANews, pointed out that the recent surge in the cryptocurrency market was overly aggressive, with various technical indicators showing divergence. The greed index reached 80, nearing its all-time high, and contract holdings approached $100 billion, a historical record. These signs indicated significant FOMO (fear of missing out) sentiment in the market, suggesting a high risk of a correction.

Wang further analyzed the uncertainty surrounding the long-term market trend. He suggested that if President Trump, upon retaking office, fulfills his previous promises regarding the crypto industry and implements related policies, it could further promote industry development. However, Trump's protectionist trade policies could also exacerbate inflationary pressures, forcing the Federal Reserve to adopt a tighter monetary policy, thus impacting market liquidity. Therefore, the long-term trend of the crypto market remains highly uncertain, and investors need to closely monitor market changes and proceed with caution.

Victory Securities in Hong Kong, in a report released after Trump's election victory, noted that the cryptocurrency market is driven by multiple factors, with significant market sentiment fluctuations. Trump's election provided a short-term bullish signal for the market, boosting Bitcoin and the overall cryptocurrency market capitalization. The Federal Reserve's continuous rate cuts, while not providing clear guidance on future direction, fueled market expectations that lower rates would lead to capital inflows into risk assets, further supporting Bitcoin and other cryptocurrencies. The growth in stablecoin market capitalization also reflected optimistic market sentiment. However, the report cautioned investors to closely monitor market trends and exercise caution to avoid chasing highs.

It's noteworthy that the crash wasn't confined to the cryptocurrency market. Overnight, significant declines were also observed in commodity markets, including gold and oil. At the close, London spot gold, London spot silver, COMEX gold, and COMEX silver all fell over 3%; WTI crude oil dropped 3.03%; and ICE Brent crude fell 2.75%.

According to CCTV News, US State Department spokesperson Matthew Miller, in a briefing on November 25th, stated that a ceasefire agreement between Lebanon and Israel had "not yet been reached," although significant progress had been made in narrowing differences. He added that efforts were underway to facilitate the agreement, but emphasized that it required "mutual agreement." There was no official response from Israel, Lebanon, or Hezbollah.

Earlier, John Kirby, the National Security Council Coordinator for Strategic Communications, had indicated that Lebanon and Israel were "close" to an agreement. Elias Bou Saab, Deputy Speaker of the Lebanese Parliament, told Lebanese media that a ceasefire was expected to be announced "in the coming hours or days," but cautioned that prudence was necessary given past experiences with Israeli Prime Minister Netanyahu. Several Israeli media outlets reported that Israel's National Security Cabinet would meet on November 26th to approve a ceasefire agreement with Hezbollah, with the final text finalized on November 25th.

The global financial market turmoil, encompassing the Bitcoin crash, cryptocurrency market liquidations, falling gold and oil prices, and the evolving situation with the Lebanon-Israel ceasefire negotiations, created a complex market environment. Investors need to closely monitor market developments, make cautious investment decisions, and manage risk effectively. The interplay of multiple factors has exacerbated market volatility, and future trends remain uncertain. Both cryptocurrency and commodity investors need to remain vigilant, avoiding impulsive investments and rationally assessing risks. This event serves as a reminder that financial market risks are inherent, and caution is essential for all investments. A thorough understanding of macroeconomic conditions, geopolitical risks, and market sentiment is crucial for making informed investment decisions. Investors should develop investment strategies aligned with their risk tolerance, avoiding excessive leverage and chasing price movements. Continuously monitoring market dynamics and adjusting investment strategies are essential for mitigating risks and protecting one's interests. In the long run, market fluctuations are normal, and investors should maintain rationality and avoid being influenced by short-term volatility. Continuous learning and enhancement of financial knowledge and risk management skills are also key to navigating market challenges. In short, cautious investment and risk management are paramount in the current complex and volatile market environment.

Source: 21st Century Business Herald, Securities Times, CCTV News

SFC Editor: Li Yutong

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