Bitcoin’s plunge triggered $495 million in liquidations

Bitcoin (BTC) plummeted to its lowest point this week, triggering almost half a billion worth of liquidations and rattling the crypto market as geopolitical tensions and heavy selling pressure spooked traders. The BTC price slipped back to the $102k zone before regaining the crucial $103k mark.

The global digital assets market cap dropped by 2% over the past 24 hours to stand at $3.2 trillion. Its 24-hour trading volume surged by 40% to hit $112 billion, suggesting that traders are moving their funds quickly amid surging uncertainties. However, the fear and greed index flashes “neutral” sentiment among the investors.

Liquidations soar to $500M

The day that began with Bitcoin hitting $106K saw it dropping below $103,000 in a matter of hours. The pullback wasn’t limited to BTC as Ethereum (ETH) plunged by as much as 4.5% in just a couple of hours. ETH price fell to a low of $2,375 as its trading volumes spiked by 89% to hit $22 billion. Ether is trading at an average price of $2,425 with a marginal recovery.

Solana, Cardano, and the biggest meme crypto, Dogecoin, were also swept up in the selloff. Their price dropped between 3% and 5% during the same session. Meanwhile, Sei has turned out to be the biggest gainer among the top 100 crypto. Sei price is up by 10% in the last 24 hours and is trading around $0.22 at press time.

The sell-off has triggered widespread liquidations across the crypto derivatives market. CoinGlass data shows that 127k traders got liquidated over the last 24 hours, as the liquidations went on to hit $495 million. The single largest liquidation order of BTC/USD valued at $8 million happened on Bybit.

Around $413 million worth of liquidated positions (84%) turn out to be long bets. This suggests that traders were hoping that bullish momentum would continue ahead, but the cumulative crypto market printed red indexes. Ethereum liquidations outpaced Bitcoin’s, totaling $177 million compared to Bitcoin’s $122 million.

Bitcoin is trading at an average price of $103,485 at press time, which traders have been watching closely for a while. Its 24-hour trading volume is up by 34% to stand at $48.8 billion.

Bitcoin’s overheating zone cleared?

According to CryptoQuant data, the heatmap chart tells the story that the $103K liquidation cluster, which previously acted as a concentration point for overleveraged long positions, was completely dismantled. As Bitcoin broke through this key level, a sharp wick pushed prices below $102,500, flushing out traders who had entered long positions with insufficient margin or poor risk management.

Binance’s liquidation delta chart corroborates this move, showing a pronounced spike of over $160 million in long liquidations within minutes of the breakdown.

Simultaneously, Binance’s Net Taker Volume, smoothed over a seven-hour moving average. It plunged deeply into negative territory, hitting nearly negative $100 million. It’s the third time this month the metric has nosedived to such extremes.

The metric showed that the sell-off may have felt brutal in the moment, but events like these can ultimately be constructive. Aggressive liquidations and deep negative taker volumes typically signal that speculative excess has been flushed from the system. It suggests that the removal of weak-handed leverage can make the way for more stable price action.

Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now