Bitcoin Plunges Below $70K, Triggers $1B Crypto Market Liquidation

According to data from CryptoSlate, the selloff was led by Bitcoin’s retreat to lows not seen since the November 2024 election, dragging the entire digital asset class into the red. Ethereum slid 7% to around $2,065, while XRP, a recent outperformer, was hit hardest with a drop of more than 14% to $1.35. Other major tokens tagged in the analysis, including Cardano (ADA), BNB, Solana (SOL), and Dogecoin (DOGE), posted similar significant losses, succumbing to a wave of selling pressure.

The slump reflects a rapid shift in sentiment from post-election euphoria to risk-off capitulation. Market observers, including Samson Mow, founder of the Bitcoin-focused firm Jan3, argue this downturn differs from prior drawdowns driven by discrete shocks. In social media comments, Mow characterized the selloff as particularly painful due to its asymmetry, noting that cryptocurrencies like Bitcoin struggle to benefit from risk-on narratives in traditional markets but remain fully exposed to broader risk-off moves. When fears emerge around artificial intelligence valuations or metals retreat, crypto sells off in tandem, highlighting its increased sensitivity as capital rotates toward equities and commodities.

The price decline was exacerbated by a sharp increase in forced selling, as detailed by on-chain analytics firm Glassnode. The firm reported that Bitcoin’s capitulation metric recorded its second-largest spike in the past two years, a clear signal of a rapid escalation in liquidations and position unwinds. Such stress events typically coincide with accelerated de-risking and heightened volatility as traders are forced to reset their exposure.

This on-chain stress manifested violently in derivatives markets. Data from Coinglass indicates that the initial price drop triggered a wave of liquidations, with more than $120 million in positions wiped out within a single hour as prices fell through key technical levels. The damage was overwhelmingly concentrated in long positions, which accounted for roughly $116 million of that hourly total, compared to only about $6 million in short positions.

Bitcoin-linked contracts bore the brunt of the losses, with liquidations totaling more than $86 million. Ethereum traders closed approximately $16 million in positions, while leveraged bets tied to Solana and the HYPE token were liquidated for approximately $3 million and $6 million, respectively. Over a 24-hour period, the scale of the leverage unwinding became starkly clear: total liquidations reached approximately $1.06 billion. Long positions accounted for nearly $900 million of that total, underscoring how quickly overly bullish positioning can unravel during a sharp downward move.

The scale of the liquidation event, totaling over $1 billion, underscores the immense amount of leverage embedded in the current cryptocurrency market. The fact that long positions represented approximately 85% of the total losses highlights a market that had become excessively positioned for further gains, leaving it vulnerable to a sharp correction. This liquidation cascade acts as a forced reset, flushing out overextended leverage and potentially setting a new, more stable foundation for price action.

The broader implication, as noted by observers like Samson Mow of Jan3, is the market’s apparent one-way sensitivity. The data suggests digital assets are now quick to sell off on broader macroeconomic or risk-off signals from traditional finance but are struggling to attract sustained capital inflows during risk-on periods. This dynamic points to a maturation—or perhaps a vulnerability—where crypto is increasingly correlated with traditional risk assets during downturns yet fails to decouple and rally independently. As the market digests this $1 billion reset, the focus will be on whether this liquidation event represents a healthy purge of excess or the beginning of a more sustained period of risk aversion for the asset class.