The cryptocurrency market experienced a significant downturn as Bitcoin (BTC) plummeted below the $104,000 mark, triggering over $600 million in liquidations of leveraged long positions. This marks the highest level of liquidations since February, highlighting the volatility and risk associated with leveraged trading in the crypto space.
---
Market Turmoil and Liquidations
In the past 24 hours, the crypto market saw a total of $688 million in liquidations, with 89% stemming from long positions. The largest single liquidation was a $12.25 million BTC/USDT position on OKX, according to data from Coinglass. Bitcoin-tracked futures led the losses with over $153 million, followed by Ethereum (ETH) at approximately $122 million. Other notable cryptocurrencies affected included Solana (SOL) with about $33 million in liquidations, XRP futures at $30 million, and Dogecoin (DOGE) futures at over $22 million .
---
Geopolitical Factors at Play
The market downturn was exacerbated by renewed trade tensions between the U.S. and China. U.S. President Donald Trump accused China of violating a bilateral trade deal, leading to a doubling of tariffs on steel and aluminum to 50% to safeguard domestic industries. This move rattled global trade markets and had potential implications for key minerals and overall relations between the two nations .
---
Broader Market Impact
The broader crypto market was also swept by the sell-off, with Ether down nearly 4%, XRP and Solana falling around 4-5%, and Dogecoin diving over 8% on the day. Data from Deribit showed that open interest in Bitcoin futures had surged 51% since April, with options up 126%, indicating a growing appetite for leverage among investors. However, large holders with more than 10,000 BTC have shifted from accumulation to net selling, suggesting profit-taking behavior .
---
Looking Ahead
A cascade of liquidations often signals market extremes, where a price reversal could be imminent as market sentiment overshoots in one direction. The renewed tariff flare-up, combined with a jittery derivatives market, has traders preparing for more volatility ahead. The market's reaction to these events underscores the sensitivity of crypto markets to broader economic and geopolitical developments, highlighting the need for cautious navigation in the current environment .