Crypto Quill

Bitcoin’s recent drop has sent ripples through the cryptocurrency market, with XRP and Dogecoin leading the charge in losses. Despite the pullback, optimism persists, and many are still betting on Bitcoin reaching the coveted $100,000 mark.

Bitcoin’s Volatility Triggers Market-wide Pullback

Bitcoin (BTC) experienced a significant drop this weekend, falling from a high of $98,500 to a low of $95,500 on Sunday. This sharp pullback sent shockwaves through the broader crypto market, triggering a decline across many altcoins and smaller tokens.

The price drop, which equates to a drop of more than 3.5%, was largely expected as Bitcoin neared the $100,000 milestone, leading to a technical pullback and profit-taking by investors. The dip also highlighted the volatility of the crypto market, with Bitcoin’s brief loss impacting other major cryptocurrencies.

While Bitcoin’s price recovery during the early hours of Monday helped stabilize the market, it still marked a significant correction for the digital asset. This triggered a broader market retreat, with altcoins like XRP and Dogecoin taking the brunt of the losses.

Altcoins Feel the Heat

As Bitcoin pulled back, smaller altcoins like XRP and Dogecoin saw more severe losses. Both tokens fell over 5%, leading the charge in losses among major cryptocurrencies. Other coins, including Solana (SOL), Ether (ETH), Cardano (ADA), and Binance Coin (BNB), also dropped between 2% and 5% before beginning to recover during the early hours of Monday.

These declines contributed to a 2.4% drop in the overall cryptocurrency market capitalization. The CoinDesk 20, an index tracking the performance of the top 20 cryptocurrencies, reflected a similar trend, with a 1.48% decrease in the past 24 hours.

Despite the pullback, the broader sentiment remains relatively optimistic, with many analysts still predicting that Bitcoin will eventually hit the $100,000 target, driven by institutional demand and positive macroeconomic factors.

Liquidations Take a Toll

The pullback caused significant liquidations in crypto-tracked futures markets, with over $500 million evaporating across both bullish and bearish positions. According to data from Coinglass, $366 million in long positions (bets that Bitcoin would rise) were liquidated, alongside $127 million in short positions (bets that Bitcoin would fall).

Interestingly, small altcoins and midcap tokens took a larger hit in terms of liquidations, with over $100 million wiped out from their futures positions—more than both Bitcoin and Ether combined. This suggests that traders may have been taking on higher risk as they tried to capitalize on the volatile market conditions.

Despite the liquidations, many traders aren’t overly concerned by the pullback. In fact, some believe the market is simply going through a short-term correction before continuing its upward trajectory.

Institutional Optimism and Future Outlook

Even with the drop in prices and widespread liquidations, market analysts remain confident that the rally is far from over. Jeff Mei, COO at crypto exchange BTSE, pointed out that Bitcoin’s dominance in the market is a positive sign, particularly as much of the demand is driven by institutional investors buying into Bitcoin ETFs. This trend is expected to continue, especially as Ethereum ETFs gain traction and Solana ETFs potentially get approved in the near future.

Additionally, positive news in traditional financial markets, like steady stock market gains and the potential for pro-crypto policies under the Trump administration, is fueling investor optimism. According to Mei, the ongoing political discussions involving crypto executives could pave the way for even greater institutional involvement in the coming months.

As 2025 approaches, analysts are optimistic that Bitcoin could hit $100,000, with Ethereum and other major tokens likely to follow suit, bolstered by institutional interest and favorable macroeconomic conditions.