Bitcoin Rejection at $116K Triggers $630M Crypto Liquidations

Bitcoin’s price action has been nothing short of dramatic over the past week, showcasing the extreme volatility that continues to define cryptocurrency markets. The digital asset began its recovery journey over the weekend, bouncing strongly from last week’s crash lows of $101,000 on exchanges like Binance. This impressive rebound saw BTC surge past $110,000 and continue climbing through Sunday and Monday, ultimately touching $116,000 and regaining $15,000 from its bottom in just a few days.

However, the bullish momentum proved short-lived as bears reemerged on Tuesday morning. Bitcoin faced stiff resistance at the $116,000 level and was promptly pushed south by over four thousand dollars, slipping below $112,000 earlier today. The cryptocurrency currently hovers around this level, with its market capitalization dropping to $2.235 trillion according to CoinGecko data. Notably, Bitcoin’s dominance over altcoins has regained some traction since yesterday, climbing to 57.5% as investors appear to be seeking relative safety in the market leader amid the widespread sell-off.

While Bitcoin experienced a significant pullback, the altcoin market suffered even more painful declines within the same timeframe. BNB, which had been a recent high-flyer after tapping a new all-time high just yesterday, has plummeted by over 11% and now sits dangerously close to breaking below the $1,200 support level. The losses extended across the broader altcoin spectrum, with MNT and ZEC joining BNB as the other double-digit daily losers.

The selling pressure was widespread and severe. Ethereum dropped to $4,000 following a 4% decline, while XRP slumped beneath the $2.50 psychological level after a 6% drop. Dogecoin (DOGE) retreated to $0.20 after a 5.25% decrease, and further losses were evident from Cardano (ADA), Stellar (XLM), and many other major cryptocurrencies. This broad-based decline highlights how altcoins typically experience amplified volatility compared to Bitcoin during market downturns, often suffering deeper corrections when sentiment turns negative.

The substantial volatility has once again proven disastrous for over-leveraged traders, with the total number of liquidated market participants exceeding 210,000 on a daily scale. According to data from CoinGlass, the total value of liquidated positions has jumped to a staggering $630 million, underscoring the brutal efficiency with which sudden market moves can wipe out speculative positions.

This liquidation event represents the second major flushout in recent trading history, following last week’s crash that was triggered by US President Donald Trump’s threat of new tariffs against China. That previous episode saw Bitcoin plunge from $122,000 ahead of the statement to $110,000, before a mass wave of liquidations drove it even lower to $101,000 on some exchanges. The pattern of rapid price movements triggering cascading liquidations has become a recurring theme in cryptocurrency markets, highlighting the risks associated with high leverage trading in such a volatile asset class.

The current market turbulence occurs against a backdrop of ongoing geopolitical tensions, particularly between the United States and China. Last week’s initial crash was directly attributed to President Trump’s tariff threats, which sent shockwaves through risk assets including cryptocurrencies. The fact that markets remain sensitive to such macroeconomic developments underscores cryptocurrency’s evolving but still uncertain status as a risk-on asset class.

For traders and investors, the recent price action serves as a stark reminder of cryptocurrency’s inherent volatility. The rapid $15,000 recovery from weekend lows followed by an equally swift rejection at resistance demonstrates how quickly market sentiment can shift. With Bitcoin’s dominance climbing to 57.5% as altcoins bleed more heavily, market participants appear to be rotating into relative safety, though even the market leader couldn’t escape significant selling pressure. As the dust settles from this latest volatility episode, all eyes will be on whether Bitcoin can defend the $112,000 level or if further downside awaits in this ongoing battle between bulls and bears.