This dip is quite severe. In the past day, the crypto market directly evaporated $519 million — with longs alone losing $370 million. You read that right, in USD.

The trigger starts with the Federal Reserve's press conference. On December 10th, 89% of the market was betting on a 25 basis point rate cut, all waiting for this positive news to buy in. But as soon as Powell opened his mouth, the tone changed: "Inflation? Still high." The implication was don’t expect major easing. The 10-year US Treasury yield shot up to 4.25%, causing leveraged traders to instantly become uneasy.

What’s more concerning is that this time, it’s not just the US tightening. Japan suddenly took a major step — the two-year government bond yield broke 1% for the first time in ten years. Sounds insignificant? But for institutions engaging in yen arbitrage, this is a death knell. The cost to borrow yen to buy cryptocurrencies has increased, triggering a wave of liquidation. As global liquidity tightens, high-volatility assets like Bitcoin are naturally among the first to be affected.

Currently, open interest has fallen to $131 billion, clearly indicating that traders are retreating. Standard Chartered has lowered its year-end BTC target price, and Nic Puckrin from Coin Bureau bluntly said: “A rebound in December? Not very realistic. Unless spot demand picks up, expect more sideways movement.”

From a technical perspective, analysts suggest short-term support ranges between $88,000 and $84,000. But honestly, given the current environment, with the European Central Bank’s core inflation exceeding expectations, hopes for rate cuts are slim. Central banks worldwide are singing the same tune — risk assets are unlikely to see a rally in the short term.

Volatility is definitely increasing, so rather than staring at candlesticks trying to guess tops and bottoms, it’s better to control your positions properly. After all, the more than $500 million liquidated is a vivid lesson.