Bitcoin (BTC) has experienced a dramatic sell-off, breaking below the critical $70,000 support level for the first time since November 2024. The price plummeted to around $69,250 on Binance, marking a decline of over 8% in the last 24 hours and more than 20% over the past seven days. This sharp downturn has pushed the broader cryptocurrency market into a state of extreme fear, as indicated by CoinMarketCap's Fear and Greed Index plunging to a reading of 11.
The price collapse triggered a massive wave of liquidations in the derivatives market. In the last 24 hours, approximately $1 billion worth of leveraged positions were liquidated. The majority of these were long positions, with $797 million wiped out compared to $161.5 million in short positions. Bitcoin led the liquidation tally with $453 million, followed by Ethereum (ETH) at $234 million, Solana (SOL) at $70.6 million, and XRP at $33.4 million. In total, 206,074 traders were liquidated.
Analysts point to several contributing factors for the capitulation. A significant $40 billion drop in Bitcoin's open interest (OI) from its peak signals a massive unwinding of leveraged bets and declining institutional demand. Furthermore, notable on-chain movements, such as the nation of Bhutan moving $22 million worth of BTC to the trading firm QCP, have added to the selling pressure. The decline is characterized as a long squeeze, where cascading liquidations of bullish positions fuel further bearish momentum.
Ethereum and other altcoins mirrored Bitcoin's decline, with ETH falling 7.6% to around $2,070. The market is now grappling with the fear of continued downside, as Bitcoin struggles to hold above the $69,000-$70,000 range, a zone last seen during its 2021 peak.
