Massive $1.73 Billion Liquidation Hits Crypto Market, Bitcoin Drops to 5-Month Low
- Global crypto market cap plunged to $3.39 trillion, erasing $840 billion in a month.
- Bitcoin dropped below $100,000 as over $1.73 billion in leveraged positions were liquidated.
- Despite chaos, adoption and institutional interest in digital assets continue to grow.
The crypto market has entered one of its most volatile phases this year, sparking widespread liquidations and panic selling. According to CoinMarketCap, the global crypto market capitalization fell by another 2%, sliding to $3.39 trillion.
CoinGlass data revealed that liquidations totaled $1.73 billion within 24 hours, with $1.32 billion belonging to long positions. Bitcoin bore the brunt of the selloff, suffering $429.16 million in long and $58.54 million in short liquidations as its price fell below the $100,000 mark for the first time since mid-May.
The downturn has rattled investor sentiment further, particularly after Bitcoin spot ETFs recorded $578 million in outflows on November 4, marking five straight days of withdrawals.
Market expert Trader Tardigrade noted that Bitcoin’s 21.62% pullback resembles the healthy corrections seen earlier in 2024. Despite the sharp drop, he maintained that the broader crypto bull cycle remains intact, describing the move as part of Bitcoin’s recurring market rhythm.
Also Read: Bitcoin Price Outlook: $125K Target Unlikely for 2025 Rally
$1.2T Wiped Out in Eight Weeks Amid Liquidation Wave
Shanaka Anslem Perera described the crash as a massive liquidation event rather than a traditional market decline. Over a period of eight weeks, more than $1.2 trillion in market value was wiped out as the total market cap dropped from $4.6 trillion to $3.4 trillion.
On October 10, margin calls of $19 billion led to the liquidation of nearly half a million traders. Open interest rose as high as $217 billion before dropping 43%, leading to a self-reinforcing cycle of decline.
Perera highlighted that the crisis was caused by too much leverage and too little liquidity, driving exchange depth to only 5% of normal.
While at the same time, fundamental metrics continue to indicate a robust market, including 560 million users globally, with stablecoins at 30% of all transactions, and institutional investors such as BlackRock and MicroStrategy totaling over one million Bitcoin.
Crypto Market Panic Echoes 2019 Supermoon Cycle
Amidst such panic in the market, it is a fact that optimism is also present in the investing community. Whale.Guru compared the current market sentiment to a supermoon in 2019.
On the other hand, Leo Lanza, a founder of ETHisDigitalOil.eth, said that the current shutdown of the U.S. federal government has caused a liquidity crisis, as funds worth above $300 billion have been constrained in terms of circulation.
Nevertheless, with plans by the Federal Reserve to conclude quantitative tightening as of December 1, it is understood that market liquidity will be enhanced, and digital currencies such as Bitcoin and Ethereum may start performing well soon.
Also Read: Crypto Market Correlation With S&P 500 Breaks as Bitcoin Falls Under $100,000
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