This week, Bitcoin (BTC) hit a low that triggered nearly $500 million in liquidations, with geopolitical tensions and heavy selling pressure causing panic among traders, disrupting the cryptocurrency market. The BTC price briefly fell back to the $102,000 range but later recovered the critical $103,000 mark.
The global market capitalization of digital assets fell by 2% in the past 24 hours to $3.2 trillion. Its 24-hour trading volume surged by 40% to $112 billion, indicating that traders are rapidly reallocating funds amid heightened uncertainty. However, the Fear and Greed Index shows that investor sentiment is 'neutral.'
▶️ Liquidation amount surged to $500 million
Bitcoin's price briefly surpassed $106,000 that day but fell below $103,000 within just a few hours. Not only BTC saw a retracement, but Ethereum (ETH) also plummeted 4.5% in a matter of hours. ETH's trading volume surged 89% to $22 billion, dropping to a low of $2,375. The average trading price for Ether was $2,425, showing a slight recovery.
Solana, Cardano, and the largest meme cryptocurrency Dogecoin were also caught up in the sell-off. Their prices fell by 3% to 5% within the same trading day. Meanwhile, Sei became the biggest gainer among the top 100 cryptocurrencies. The price rose by 10% in the past 24 hours, trading at around $0.22 at the time of writing.
The sell-off triggered massive liquidations in the cryptocurrency derivatives market. According to CoinGlass data, a total of 127,000 traders were liquidated in the past 24 hours, with liquidation amounts reaching up to $495 million. The largest single liquidation order occurred on Bybit, involving BTC/USD, valued at $8 million.
About $413 million of the liquidated positions (84%) ultimately proved to be long positions. This indicates that traders were hoping for bullish momentum to continue, but the cumulative index in the cryptocurrency market showed a decline. The liquidation amount for Ethereum exceeded that of Bitcoin, totaling $177 million, while Bitcoin's liquidation amount was $122 million.
As of the time of writing, Bitcoin's average trading price was $103,485, which traders were closely monitoring. Its 24-hour trading volume grew by 34% to $48.8 billion.
▶️ Has the Bitcoin overheating area been cleared?
According to CryptoQuant, the heatmap data shows that the $103,000 liquidation cluster, previously a focal point for over-leveraged long positions, has been thoroughly dismantled. As Bitcoin broke through this critical level, a strong 'wick' pushed the price down below $102,500, forcing traders who had taken long positions with insufficient margin or poor risk management out of the market.
The liquidation incremental chart from Binance confirms this move, showing that within minutes after the crash, the amount of long liquidations surged significantly to over $160 million.
Meanwhile, Binance's net position of market orders was slightly below the seven-hour moving average. This indicator dropped into negative territory, with a decline of nearly $100 million. It marks the third time this month that the indicator has plummeted to such extreme levels.
The indicator shows that the sell-off may have felt brutal at the time, but such events can ultimately be constructive. Aggressive liquidations and deep negative recipient trading volumes typically indicate that excessive speculative behavior has been cleared from the system. This suggests that eliminating weak leverage can pave the way for more stable price movements.