The price of Bitcoin plummeted sharply on August 14, retreating from $120,000, less than a day after reaching its all-time high of $124,000. According to CoinMarketCap data, Bitcoin's price dropped to $118,479 at the time of publication, recording a decline of 2.07% on the one-hour candlestick chart, and 5% from its highest level in 24 hours.

The sudden decline spread across the entire cryptocurrency market. Ethereum fell by 4% to $4,581, while Ripple dropped by over 3% to $3.11. Other coins among the top ten, including Dogecoin, Solana, and BNB, also saw losses exceeding 3% during the same timeframe.

This correction comes after a period of sustained growth that pushed the market as a whole to record levels. While the speed of the pullback may have surprised some traders, market analysts had warned of potential risks. On August 13, blockchain analytics firm Glassnode noted that open trading volume on major altcoins had risen to a record level of $47 billion.

Open interest for major altcoins (source: Glassnode)

According to the firm, such high leverage can amplify price surges and corrections, putting traders at risk during sudden market volatility.

Long-term traders lost over $500 million in one hour.

Coinglass data shows that the sharp price movement caused $577 million in liquidations in just one hour.

Long-term traders, who anticipated rising prices, took the brunt of the losses, totaling $545 million. Short positions lost $31 million.

Ethereum traders suffered the largest losses, with liquidations exceeding $177 million. Bitcoin traders lost around $113 million, while XRP and Solana positions were liquidated for $44 million and $39 million respectively.

The cryptocurrency market was liquidated on August 14 (source: CoinGlass)

With the liquidation period extended to the last 24 hours, total losses amounted to $1.05 billion. Long positions accounted for $778 million of this, highlighting the increasing risks during rapid price corrections.

These figures highlight the extreme volatility inherent in the cryptocurrency market. Sudden corrections can wipe out large unrealized gains, especially when leveraged positions dominate trading activity.

For traders, this serves as a reminder that strong upward trends are often accompanied by equally strong pullbacks, underscoring the importance of risk management strategies in volatile markets.