184,600 people liquidated! Cryptocurrency plummets, global risk assets under pressure

On December 16, the cryptocurrency market sharply fell, with Bitcoin dropping below $86,000, a decline of over 4%; Ethereum and XRP fell over 6%. According to Coinglass data, over $600 million in contracts were liquidated within 24 hours, affecting 184,600 people, with long positions liquidating $505 million, and the largest single liquidation coming from Binance-BTCUSDT, valued at $11.5818 million.

Overnight, US stocks related to cryptocurrency collectively plummeted, with BMNR and Riot Platforms falling over 10%. Analysts pointed out that the cryptocurrency market's trends are highly correlated with US stocks, and the adjustment in US stocks stems from concerns over the sustainability of capital expenditure in the AI sector. Bridgewater stated that AI investments have entered a stage of "hidden risks."

Currently, the market is closely watching two major variables: first, the upcoming US unemployment rate, CPI, and speeches from Federal Reserve officials to capture clues on interest rate paths; second, expectations for interest rate hikes from the Bank of Japan, with the market generally anticipating a 25 basis point increase to 0.75% this week, which may impact global risk asset liquidity.

It is noteworthy that Bitcoin has retraced over 30% from its historical peak, and recently has shown a disconnection from other risk assets. The Federal Reserve's rate cuts have also failed to reverse the trend. Analysts believe that this round of decline is driven by proactive adjustments in positions, with high-leverage positions already cleared, and the market exhibiting a "bottoming out" characteristic, making reversal difficult.

The Asia-Pacific market fell in sync, with the Nikkei 225 index down over 1.4% and the Korean Composite Index down nearly 1.7%.