Bitcoin (BTC) experienced a sharp drop, reaching just above $100,000 on Monday night. The price rebounded slightly to $101,000 shortly after. This volatility generated a massive wave of forced liquidations in cryptocurrencies. These automatic sales wiped out billions in leveraged speculative positions. Data from the CoinGlass platform indicated that over $2 billion in futures contracts were liquidated during Tuesday’s session, marking a red day.
Losses were overwhelmingly concentrated on bullish (long) traders. They accounted for nearly 80% of the total, totaling $1.6 billion in direct losses. Futures liquidations occur when traders using borrowed funds see their margin fall below required levels. At that point, platforms automatically close their positions to cover the losses. This deleveraging event is one of the largest recorded since September. The price action highlights how fragile recent market positioning has become.
The impact was not limited to Bitcoin, which accumulated a 5.5% drop on the day and more than 10% over the last week. Other major cryptocurrencies in the market suffered even steeper declines. Ether (ETH) plummeted 10% to settle at $3,275. Meanwhile, Solana’s SOL and BNB lost 8% and 7% respectively. Assets like XRP, Dogecoin, and Cardano also registered drops between 5% and 6%. The total crypto market capitalization retreated towards $3.5 trillion. This is its lowest level in over a month.
Is this volatility a warning sign or a simple market correction?
Gerry O’Shea, head of global market insights at Hashdex, commented on the situation. He explained that “Bitcoin traded around $100,000 on Tuesday as risk-off sentiment took hold of financial markets.” O’Shea noted that this impacted a wide range of digital assets, stocks, and commodities. Furthermore, macroeconomic concerns are influencing the price. Among them is speculation that the FOMC might pass on another rate cut this year. Fears about tariffs and credit market conditions are also having an effect.
Exchange platforms registered frantic activity. According to the data, Bybit led the liquidations with a total of $628 million. It was followed by Hyperliquid with $533 million and Binance with $421 million. The largest single closure reported was an $11 million BTC-USDT long position on the HTX platform. These types of massive liquidation events can signal capitulation, creating potential short-term bottoms.
Despite the sharp volatility, analysts maintain a constructive long-term view. O’Shea stated that while “$100,000 may be an important psychological support level,” Tuesday’s price action is not seen “as a sign of a weakening long-term investment case for Bitcoin.” Nevertheless, with the Federal Reserve on pause and global risk appetite still fragile, the next few sessions will be key. They will test whether Bitcoin’s bounce can be sustained or if another wave of forced selling is on the horizon.
