The cryptocurrency market faced a significant downturn on Thursday, with major assets like Bitcoin, Ethereum, and Dogecoin experiencing notable price drops. This sudden decline triggered a wave of liquidations, particularly impacting traders who had bet on rising prices.
Market Overview: Liquidations Surge Amid Price Drops
Over $320 million in long positions—trades that profit if prices rise—were liquidated in just one hour, according to data from CoinGlass. In total, the past 24 hours saw $713 million in crypto positions wiped out, with $650 million of that coming from long bets. This highlights the risks of overleveraged trading in volatile markets 1.
Bitcoin led the liquidations, with $317 million in positions closed, including $306 million in longs. The price of Bitcoin fell nearly 3% over the day, dropping below $106,200. Despite this, Bitcoin remains up about 5% over the past week, though it has retreated from its recent high above $110,000 1.
Ethereum was the next hardest hit, with $151 million in daily liquidations. Its price dropped more than 6% to $2,650, although it still shows a 9% gain over the past seven days due to earlier bullish momentum 1.
Other major cryptocurrencies also suffered:
• Solana: Down over 6% to $152.80
• XRP: Down more than 4% to $2.20
• Dogecoin: Fell 7% to $0.181, making it the biggest loser among the top 10 coins during this period 1.
What Triggered the Sell-Off?
The downturn followed the release of cooler-than-expected Consumer Price Index (CPI) data, which initially sparked optimism but quickly led to a “buy the rumor, sell the news” reaction. Investors took profits after the inflation report, causing a technical breakdown as the total crypto market capitalization fell below a key $3.35 trillion support level. This triggered algorithmic selling and stop-loss orders, accelerating the downward momentum across the market 1.
Long-Term Outlook Remains Constructive
Despite the sharp correction, analysts remain cautiously optimistic about the long-term prospects for Bitcoin and other major cryptocurrencies. Forecasts for Bitcoin suggest a trading range between $100,000 and $120,000 in the near term, with some models projecting even higher targets by year-end if bullish momentum returns 1.
The underlying supply-demand dynamics remain favorable. With 95% of all Bitcoin already mined and the majority of the global population yet to own any, there is significant potential for future price appreciation as adoption grows 1.
Key Takeaways for Crypto Investors
• The recent sell-off underscores the risks of leveraged trading in crypto markets, especially during periods of heightened volatility.
• While short-term price action has been negative, the broader trend for major assets like Bitcoin and Ethereum remains intact, supported by strong fundamentals and ongoing institutional interest 1.
• Investors should remain cautious, monitor key support levels, and consider the long-term growth potential of the crypto sector.
