Bitcoin Plummets to $97K as $1.1B Liquidated – What’s Fueling the Market Crash?
Crypto Market Plummets: Bitcoin Falls Below $100K as $1.1 Billion Liquidated Amid Whale Sell-Offs
The global cryptocurrency market experienced a sudden and sharp downturn over the past 24 hours, rattling investors and traders alike. Bitcoin slipped below the $100,000 mark, while major altcoins suffered steep losses. The sell-off has triggered over $1.1 billion in liquidations across the crypto market, leaving analysts and market participants questioning what is driving this sudden wave of volatility and what the short-term outlook might be.
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Bitcoin Whales Spark Panic
A key factor behind the market decline is the activity of long-term Bitcoin holders, commonly referred to as "whales." Data from CryptoQuant reveals that approximately 815,000 BTC were sold in the past 30 days, the highest volume of long-term holder sell-offs since early 2024.
When investors who typically retain their holdings for years begin to liquidate large positions, it sends a clear signal to the broader market. Many traders interpret this as a warning that prices may be peaking, prompting further selling. This surge in supply has contributed to Bitcoin’s recent instability, as the market struggles to absorb such a significant influx of coins on exchanges.
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Breaking Key Support Levels
Bitcoin’s fall has not only been steep but also structurally significant. The digital asset breached the psychological $100,000 support level, which traders and analysts had been watching closely. The drop continued past the 200-day exponential moving average (EMA) at $98,000, amplifying concerns about market direction. Technical indicators suggest heightened weakness, with Bitcoin’s Relative Strength Index (RSI) falling to 28, indicating that the cryptocurrency is in oversold territory.
Adding to the pressure, miners contributed to the sell-off by transferring BTC to exchanges for liquidity purposes. The influx of coins into the market has compounded selling pressure, forcing leveraged traders to close positions and intensifying the downward momentum.
Crypto’s Correlation With Tech Stocks
The drop in Bitcoin prices also underscores the continuing correlation between cryptocurrencies and the broader technology sector. Research from Winterminutes indicates that Bitcoin maintains an approximate 0.8 correlation with the Nasdaq-100 index, meaning it largely mirrors movements in tech equities. While U.S. markets were closed during parts of the crypto downturn, investor sentiment remained sensitive to concerns about interest rates and the performance of tech stocks, adding to the pressure on Bitcoin and major altcoins.
Forced Liquidations Amplify Volatility
The speed and severity of the decline were exacerbated by forced liquidations in leveraged positions. Over the last 24 hours alone, more than 248,000 traders were liquidated, with total liquidations surpassing $1.1 billion. Bitcoin accounted for $509 million of these liquidations, including a single $44.29 million long position that was forcibly closed.
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Liquidations trigger a cascading effect: when leveraged trades are closed automatically, selling pressure increases, pushing prices lower and forcing further liquidations in a continuous cycle until the market stabilizes. Despite this, some institutional players and whales have taken advantage of the dip, with reports of a $31 million Bitcoin long opened during the sell-off, suggesting that some market participants are viewing this as a buying opportunity.
Altcoins Suffer Heavier Losses
Altcoins have been hit even harder than Bitcoin. Ethereum fell nearly 10%, Solana declined around 9%, and other major coins including BNB, XRP, and DOGE experienced significant downward pressure. Smaller and mid-cap tokens were particularly affected, with many losing double-digit percentages. Analysts note that altcoin performance is closely tied to Bitcoin’s stability; without BTC holding key levels, broader market recovery remains uncertain.
Market Sentiment and the Fear Index
The crypto Fear & Greed Index, a measure of market sentiment, now stands at 22, reflecting extreme fear and heightened uncertainty among traders. Over the past month, the cryptocurrency market has declined by more than 16%, a trend exacerbated by ETF outflows totaling $613 million, which has further weakened investor confidence.
Short-Term Technical Outlook
Technical analysis suggests that Bitcoin must maintain support above $95,000 to prevent further decline. The oversold condition indicated by the RSI raises the possibility of a short-term rebound, but the broader market remains under pressure. For altcoins to recover, Bitcoin must first stabilize, as their movements are highly correlated with BTC.
Analysts are closely monitoring the $95,000 support level. If breached, the next significant support zones could be around $92,000 and $88,000. A sustained break below these levels may trigger more widespread sell-offs, while maintaining support could create conditions for a gradual recovery.
Institutional Perspective
Despite the sell-off, some institutional players see potential opportunities. The opening of new long positions by large investors suggests a degree of confidence in the long-term resilience of Bitcoin. Analysts note that historically, periods of high fear often coincide with strong buying opportunities, particularly for long-term investors who can withstand short-term volatility.
Broader Implications for the Crypto Market
This recent downturn highlights the interconnected nature of the crypto market, its sensitivity to large-scale whale activity, and its correlation with traditional equity markets. ETF outflows, miner selling, and leveraged positions have all contributed to a sharp decline, underscoring the importance of risk management and cautious trading strategies.
Investors and market watchers are advised to pay close attention to market signals, technical support levels, and broader economic indicators, including tech stock performance and interest rate developments, which continue to influence crypto prices.
Conclusion
The sudden crypto market drop serves as a reminder of the industry’s volatility and the influence of large holders and institutional flows. While Bitcoin and major altcoins have faced steep losses, technical oversold conditions and selective institutional buying suggest potential recovery opportunities. Market participants should remain vigilant, use risk management strategies, and monitor key support levels in the coming days to navigate the turbulent market.
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