Bitcoin short-term big dump triggered $637 million in liquidations, market panic intensifies but long-term sentiment remains optimistic.

Bitcoin has fallen by 5% in the past 24 hours, with the price dipping to $85,694 at one point, currently hovering around $86,800, which is a 31% pullback from its historical high. The cumulative decline over the past month has exceeded 21%, with high Beta assets such as Ethereum and Ripple also declining, down 5.6% and 6.5% respectively. Market risk aversion is on the rise, with CoinGlass data showing a total liquidation across the network of $637 million, of which long positions accounted for $568 million.

SynFutures COO Wenny Cai stated that this round of plunge is driven by a “momentum-driven accelerated decline” that triggered a large-scale liquidation of long positions, and the clearing further pushed the sell-off in spot and derivatives, creating a chain reaction. Another core factor of market panic comes from MicroStrategy CEO Phong Le's remarks—if dividends need to be paid at a price lower than 1x mNAV, the company “may sell Bitcoin.” MicroStrategy holds approximately 649,870 Bitcoins, worth over $56 billion, and this statement has raised investors' concerns about supply pressure.

In addition, S&P lowered the rating of MSTR, and related media reports have exacerbated market fragility. Nevertheless, the Myriad market forecast shows that the probability of MicroStrategy selling Bitcoin before the end of the year is only 5%.

At the same time, Arthur Hayes warned that if Bitcoin and gold fall by 30%, the equity of the stablecoin issuer Tether will be wiped out, further amplifying panic. Considering Tether's recent allocation in gold and Bitcoin, the market fears that it will be under pressure during extreme volatility, leading to increased liquidity risks.

The People's Bank of China recently reiterated that cryptocurrency trading is illegal and expressed concerns about stablecoins, which also suppressed market sentiment during the Asian trading session.

Despite the weak short-term trend, Cai believes that the market will maintain severe fluctuations in December, rather than a sustained decline, and is expected to experience a structural volatility of “short-term crash → leverage liquidation → value buying returning.” Predictive market data also shows that investors still have confidence in the long-term outlook, believing that the probability of a “crypto winter re-emerging” is only 12%.