Bitcoin, Ethereum plunge up to 7%; forced liquidations hit $600M
What's the story
The cryptocurrency market witnessed a major sell-off in the last 24 hours, with Bitcoin and Ethereum witnessing significant losses. Bitcoin fell by nearly 5% to trade at $85,507 while Ethereum dropped by 7%, now trading at $2,904. The global crypto market capitalization also took a hit, falling by almost 4% to $2.93 trillion, according to data from CoinMarketCap.
Altcoin impact
Major altcoins also witness significant losses
The recent market downturn has not spared major altcoins either. BNB, XRP, Solana, Tron, Dogecoin, Cardano and Hyperliquid all witnessed losses of over 9% in the last 24 hours. Riya Sehgal from Delta Exchange noted that the sell-off was accompanied by forced unwinds across derivatives markets with over 183,500 traders liquidated. This brought total liquidations to an estimated $592-$600 million in just one day.
Market factors
Market uncertainty and regulatory delays
Sehgal further explained that the sell-off reflects a broader risk-off shift across global markets. Uncertainty over the next US Federal Reserve Chair, rising fiscal stress in the US, and signs of slowing consumer demand have all contributed to this sentiment. Additionally, a delay in US crypto market structure legislation until 2026 has removed a near-term regulatory catalyst, adding to short-term caution across the sector.
Sentiment analysis
Market sentiment remains cautious amid downturn
Despite the recent downturn, market sentiment remains cautious rather than slipping into extreme fear. This suggests traders expect a reversal soon. Nischal Shetty, founder of WazirX, said global markets are firmly in risk-off mode with Bitcoin and Ethereum reflecting that shift. He also noted a clear liquidity imbalance beneath the surface as Bitcoin slipped below $86,000 level.
Liquidation impact
Long liquidations trigger Bitcoin's recent drop
CoinSwitch Markets Desk observed that Bitcoin's recent drop was mainly due to long liquidations. After trading sideways around the $89K-$90K range, BTC broke below support and fell into a high-liquidity zone between $86K and $88K. It briefly bottomed near $86K, forcing many leveraged traders to exit their positions. This accelerated the decline and cleared excess leverage from the market.