#Bitcoin Drops Below $112K as $1.7B in Crypto Liquidations Rock the Market: Can Recovery Follow?
The crypto market faced a sharp sell-off in the past 12 hours, with Bitcoin (BTC) tumbling from $115,600 to $111,800, a 3.31% drop, while Ethereum (ETH) plunged 9.34%, marking one of the steepest overnight declines in recent weeks.
The move came amid low liquidity during late-night U.S. trading hours, creating ripe conditions for what analysts describe as a liquidity hunt. More than $1.7 billion in positions were liquidated across the crypto market, with longs accounting for a staggering $1.62 billion, according to CoinGlass.
Now, traders are closely watching Bitcoin’s next moves as the $112.9K and $116.1K levels emerge as critical markers for potential stabilization—or deeper losses.
Why Did Bitcoin and the Crypto Market Crash Overnight?
The sudden drop did not come out of nowhere. Several factors combined to create the perfect storm:
Low liquidity window – Sunday night into Monday morning U.S. hours often sees thinner liquidity, making prices easier to push.
Liquidation cascade – Heavy long positioning meant that once prices dropped below key thresholds, forced liquidations snowballed into a cascade.
Market-wide sentiment fragility – Despite strong year-to-date gains, the market remains heavily dependent on leverage, which amplifies moves in either direction.
The Kobeissi Letter, a macroeconomic commentary platform, noted that Sunday night sell-offs are common in crypto due to thinner order books. Historically, these sharp declines often see partial recoveries once U.S. markets open on Monday morning, as liquidity returns.
The Scale of #Liquidations Data from CoinGlass showed $1.7 billion liquidated in just 24 hours, one of the largest single-day wipeouts of 2025.
Long liquidations: $1.62 billion
Short liquidations: $84 million
The imbalance underscores how aggressive leverage on the long side left the market exposed. When BTC dropped below $114.7K, liquidation engines triggered stop-outs across the board...
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