Original | Odaily Planet Daily (@OdailyChina)
Author | Azuma (@azuma_eth)
Around 5:00 am Beijing time on December 10th, with the short-term pullback of BTC and ETH, the altcoin sector, which had been strong for nearly half a month, was also collectively plunged.
OKX market data shows that BTC fell to a low of 94,000 USDT, and is currently (around 9:00 am) trading at 97,783.4 USDT, a 24-hour drop of 2.03%; ETH fell to a low of 3,465.83 USDT, and is currently trading at 3,761.79 USDT, a 24-hour drop of 5.45%; SOL fell to a low of 200.95 USDT, and is currently trading at 218.31 USDT, a 24-hour drop of 6.97%.
Among the top 100 coins by market cap, except for single-digit coins like SOS, ENA and the new coin MOVE, all other coins are in a downward trend, with generally more than 10% declines. WLD (-19.4%), GALA (-18.7%), FIL (-18.3%), JUP (-17.9%), TIA (-17.7%) are among the biggest losers.
CoinGecko data shows that the total crypto market cap has fallen back to $3.65 trillion, a 7.5% drop in 24 hours. Despite the crash, the trading enthusiasm of current crypto users is still at a high level, with the Alternative Crypto Fear and Greed Index reporting 78 today, still maintaining an "Extreme Greed" level.
In the derivatives trading sector, Coinglass data shows that $1.719 billion in positions were liquidated across the network in the past 24 hours, of which $568 million was in BTC and $243 million was in ETH. Notably, unlike the relatively balanced distribution of long and short liquidations during the previous short-term pullback on November 26th, this time the long liquidations amounted to $1.551 billion, accounting for over 90%, indicating that the longs have suffered heavy losses in this morning's pullback.
Reasons for the Decline: The Quantum Threat Theory Resurfaces?
As for the reasons behind this decline, there is no definitive conclusion yet, but many industry insiders' discussions point to a development from Google this morning - on Monday local time,Google announced on its official blog the launch of its latest quantum chip Willow, claiming it can complete calculations that would take the current top supercomputers 10,000,000,000,000,000,000,000,000,000 (10 to the 25th power) years in less than 5 minutes.
The quantum threat theory is not a new issue for the cryptocurrency industry, but when a tech giant uses such compelling rhetoric to promote a new product, it still causes a certain degree of panic in the market.
However, professionals from leading projects and investment institutions have come out to clarify that the recent developments in quantum computing are unlikely to pose a threat to the cryptocurrency industry in the short term.
Emin Gün Sirer, the founder of Avalanche and a renowned academic, stated this morning that the latest developments in quantum computing are indeed impressive, but they do not currently pose a threat to the security of cryptocurrencies. Current quantum computing is only suitable for performing a few types of tasks such as integer factorization, and cannot reverse one-way hash functions. The design of mainstream blockchains like Bitcoin and Avalanche have a certain degree of quantum resistance, with public keys being exposed for a relatively short period, leaving a narrow window for attackers. Therefore, quantum computing cannot threaten cryptocurrencies in the short term. In the future, when the quantum threat becomes real, blockchains like Avalanche can quickly add quantum-resistant signatures.
Haseeb Qureshi, a partner at Dragonfly, also responded to "Professor Gün" and provided a similar explanation, attaching a Metaculus report stating that the Shor algorithm is expected to be able to break RSA keys for the first time around 2040.
However, after Haseeb's response, "Professor Gün" gave a rather frightening reply: "Haseeb's reminder made me realize that Satoshi Nakamoto's 1 million Bitcoins may indeed be under quantum threat. Early Bitcoin used a very old Pay-To-Public-Key format, which leaks the public key and gives attackers time to study it, the root of all crypto bounties. Modern Bitcoin wallets or Avalanche systems don't use P2PK, but it did exist in Bitcoin's early stages. Therefore, as the quantum threat intensifies, the Bitcoin community may need to consider freezing Satoshi's 1 million Bitcoins, or more broadly, provide a doomsday date and freeze all Bitcoins on P2PK UTXOs."
Other Explanations: Bitfinex Whales Clearing Positions
Setting aside the news, other analyses have provided explanations for this morning's decline from a market structure perspective.
Benson Sun, the founder of the data analysis platform CoinKarma, predicted in his personal X account yesterday that the future performance of ETH/BTC could turn weak, and given the higher correlation between altcoins and ETH, this may be a reference for the reason behind this morning's decline.
Benson's historical market analysis shows that in every past cycle, whenever the whales on Bitfinex have finished clearing their long positions on ETH/BTC, ETH has seen a short-term top, and these whales have just finished clearing the long positions they had accumulated since August.
Clear Buy-the-Dip Signals, Bullish Outlook Remains?
For investors, a positive sign at the moment is that with the sharp short-term pullback in the market, the OTC trading premium for USDT on major trading platforms has become quite obvious, which may indicate that the buy-the-dip sentiment remains strong and the market is still optimistic about the future outlook.
Whales have also been detected making buy-the-dip moves, on-chain analyst @ai_9684 xtpa monitored that a whale with an 84.2% win rate bought 7,682 WETH (worth $29.22 million) at an average price of $3,803 during the early morning crash; the whale's position has now grown to 11,687 ETH with an average cost of $3,861.
The bull market seems to be continuing, and in past bull market conventions, "buying the dips" has been a major strategy for many investors to profit. This time, no one knows if the same script will be played out again, so everyone must exercise caution, be aware of the risks, and do your own research.
