Bitcoin’s recent plunge surpassed expectations, with the cryptocurrency dropping below the $98,000 mark for the first time since May. This steep decline has been part of a week-long trend that has notably affected major cryptocurrencies, extending significant losses across the market.
Ether mirrored the downturn, falling over 8% to about $3,500, alongside other notable tokens such as XRP, Dogecoin, Solana’s SOL, and Cardano’s ADA, which all experienced similar declines. The overall market sentiment turned increasingly risk-off, with cryptocurrencies reflecting a broader equity weakness in Asia as traders moved to reduce leveraged positions and sought cash.
Liquidation data reveals the extent of these losses, with over $1 billion in leveraged crypto positions liquidated within a 24-hour span, predominantly from long positions. Approximately $887 million of these liquidations stemmed from traders holding bullish bets, marking one of the largest flushes of this month. This situation forced around 235,000 traders out of their positions, including a staggering $44 million liquidation of a BTC long on HTX.
Exchanges like Bybit, Hyperliquid, and Binance collectively saw more than $180 million in long liquidations, constituting over 85% of all trades in the process. Traders had previously leaned heavily into the market’s recovery, which amplified the impact of the downturn.
Market fragility was evident before this latest decline, with positive funding rates across major cryptocurrencies, climbing open interest, and diminishing spot volumes—a combination that often leads to pronounced downturns once market momentum shifts. Bitcoin’s descent below the key $100,000 level triggered a lack of liquidity, resulting in an accelerated drop towards $97,000.
Broader economic conditions have also played a part, as recent data from China indicated a more significant slowdown in economic activity than anticipated. For instance, year-on-year industrial production decreased to 4.9% from 6.5% in September, and fixed-asset investment contracted by 1.7% throughout the first 10 months of the year, marking a historic decline.
This economic news instantly impacted Asian equities, with the MSCI Asia Pacific Index declining by 1.3%, particularly affecting chipmakers. Additionally, the prospects for a December rate cut by the Federal Reserve have dimmed, following cautious comments from its officials. Current market pricing suggests the likelihood of such a rate cut is now below 50%, a sharp decrease from earlier predictions. This combination of a weakened global equity market and the shift in monetary policy expectations contributed to the recent dips in cryptocurrency values, prompting traders to reevaluate their positions as year-end approaches.
Going forward, the pressing question for cryptocurrency markets is whether the massive unwinding of leveraged positions has reached its conclusion. Bitcoin dropping below $98,000 raises attention to the support level around $94,000. Altcoins remain at risk if the equity markets continue to falter. Historically, however, washouts driven by liquidations have often indicated zones of market exhaustion. Whether this pattern will hold true is contingent on the stabilization of macro volatility in the near term.