On Wednesday morning, December 18, the U.S. crypto market experienced a brief but sharp rally, with Bitcoin (BTC) quickly pulling back to around $87,000 after briefly surpassing $90,000. CWG Markets noted that this reflects a lack of sustained support following rapid gains, signaling heightened short-term volatility risks. Concurrently, a sell-off in AI-related tech stocks amplified market pressure, dragging the Nasdaq down over 1% and dampening overall risk appetite.
During intraday trading, Bitcoin exhibited extreme price swings—surging from approximately $87,000 to above $90,000 within minutes before retreating near $87,000. According to CoinDesk, BTC last traded around $87,300, down 0.5% over 24 hours despite a brief 3% spike earlier. CWG Markets attributed this volatility to hypersensitive market sentiment near key psychological levels, where external news and sector correlations can rapidly magnify fluctuations.
The tech sector's decline served as a major trigger for the pullback. Nvidia, Broadcom, and Oracle fell 3%–6%, while the tech-heavy Nasdaq dropped over 1%. CWG Markets advised monitoring cross-market linkages between tech stocks and crypto, warning such spillover effects may fuel choppy BTC price action near-term.
Additionally, CoinGlass data revealed $190 million in crypto derivatives liquidations over four hours amid the turbulence, with long positions losing $72 million and shorts $121 million. CWG Markets highlighted concentrated risks in leveraged trades during rapid swings, urging caution against cascading effects from high leverage.
Margin liquidity constraints were cited as a key factor clouding Bitcoin's direction. Analyst Hunter Rogers observed market fatigue, where even modest selling accelerates declines. CWG Markets suggested BTC could stabilize for a rebound if it holds the $80,000–$85,000 support zone; a breakdown may invite further downside.
From technical and sentiment perspectives, CWG Markets emphasized crypto remains in a high-volatility regime, advising traders to watch critical support/resistance levels alongside global liquidity and dollar index trends. Overall, with unclear short-term direction, investors were urged to maintain prudent position sizing and risk management.
Comments