Bitcoin has seen significant turbulence recently, dropping below the psychologically important $90,000 threshold, which resulted in massive liquidations across the cryptocurrency market. The digital currency plummeted sharply, reaching lows of around $86,000, leading to liquidations totaling over $1.6 billion within just 24 hours.
This decline not only stripped Bitcoin of its value but also affected Ethereum and other altcoins, marking one of the most severe downturns the market has experienced since late 2024. By the end of the 24-hour period, Bitcoin's market cap was reported to have decreased to $2.89 trillion, reflecting a notable 7.42% decline, as per market analytics.
During this tumultuous time, Bitcoin's trading volume spiked significantly, reaching $64.5 billion, underscoring the frantic trading activity as investors scrambled to adjust their positions. Ethereum also faced substantial losses, plunging 11.6% to around $2,385 during the same period.
Liquidations primarily impacted long positions, with approximately $1.26 billion wiped out as traders betting on price increases suffered the most. Short positions also faced losses, amounting to $98.75 million. This high volume of liquidations sparked concerns among analysts, with many wondering if this moment signified the start of a more substantial market correction or merely a temporary setback before stabilization.
Data obtained from crypto analytics platform CryptoQuant indicated the highest level of Bitcoin long liquidations since November 2024, registering over $245 million within just one day. This alarming trend coincided with Bitcoin's fall from highs of $96,500 earlier on February 24 to its current plummet below $90,000.
Analysts from TradingView noted entrenched bearish sentiments, with technical signals indicating to 'sell' strongly, hinting at continued downward pressure. The oscillators and moving averages depicted patterns of selling fatigue, urging traders to proceed with caution.
Market analyst “MAC_D” suggested potential grounds for optimism, pointing out two factors: the occurrence of leverage wipeouts, which could allow swift price movements with relatively low volume, and the key support level around $89,600. This level is viewed as particularly significant, as it aligns with the average entry price for 'whales'—large investors who have held their positions for less than six months.
Despite the bearish trends, MAC_D cautioned against complacency, noting, “A breach of the [$89,600] level could increase the likelihood of a sharp decline.” On the contrary, some other technical analysts, such as “Titan of Crypto,” identified the formation of bullish patterns like the inverse head and shoulders on weekly charts, arguing the potential for Bitcoin to soon experience explosive movement back upwards.
The sell-off of Bitcoin ETFs, which accounted for approximately $500 million of market value, exacerbated these pressures. Coupled with President Trump's renewed tariff threats against Mexico and Canada, it fueled fears of economic disruptions, which, together with institutional investor outflows, created heightened volatility across the cryptocurrency market.
The combination of such trade policy uncertainties and increased liquidations has compounded fears among traders and investors, with many now closely monitoring support levels to gauge the next significant market movements. Reports also highlighted another significant liquidation episode on February 3, 2025, which had previously wiped out over $2.2 billion in leveraged positions, underlining how susceptible the market remains to rapid swings.
Overall, as Bitcoin continues to restate price levels and long positions are unwound, the narrative surrounding its recovery remains multi-faceted. With traders watching closely, only time will reveal whether this latest round of liquidation leads to sustained bearish momentum or if it provides fertile ground for recovery.
For now, it’s clear the market is experiencing memorable highs of volatility and uncertainty, as traders navigate turbulent waters amid widespread price declines. Many are left pondering how Bitcoin and the broader cryptocurrency market will weather this storm where every sentiment swing holds the potential for drastic changes.