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$1 Billion in Crypto Liquidations.

The sharp declines in crypto markets on Monday led to the liquidation of approximately $1 billion worth of leveraged trades.

Bitcoin, which fell as much as 8 percent to $83,824 in New York trading, has lost almost 30 percent of its value since the beginning of October. Ether, meanwhile, fell nearly 10 percent to $2,719, losing more than 36 percent of its value in the last seven weeks. The sell-off was particularly pronounced among small-cap crypto assets with low liquidity.

The index, which tracks the bottom half of the 100 largest digital assets, has fallen by nearly 70 percent since the beginning of the year. The crypto market also saw a major wave of liquidations in early October, with $19 billion worth of leveraged positions wiped out following Trump's tariff announcements. This occurred just days after Bitcoin reached a record high of $126,251. The automatic closing of positions due to insufficient collateral is called a "liquidation chain."

While investors closely monitor liquidation data to assess market risk appetite, the failure of some crypto exchanges to fully disclose leverage levels can lead to incomplete data. At the beginning of December, investors' focus shifted to the actions of global central banks. Last week, interest rate cut expectations briefly dipped to 30 percent in a panic, but expectations of another Fed rate cut are growing stronger. The Bank of Japan also appears more likely to raise interest rates to counter volatility in the Japanese bond market.

Despite this, there is light at the end of the tunnel; economic data will be decisive for a potential risk rally towards the end of the year. Michael Saylor announced the creation of $1.4 billion in reserves for dividend and interest payments. This step aims to alleviate concerns that the Bitcoin-accumulating company may be forced to sell some of its approximately $56 billion in crypto assets to counter a potential price drop.