$2 Billion Vanishes in Minutes: Bitcoin Plunge Sends Shockwaves Through Crypto Markets

Bitcoin

Summary:
On Friday, global cryptocurrency markets experienced a sharp decline, leading to significant sell-offs and a loss of approximately $2 billion in positions. Bitcoin dropped below $83,000, while Ethereum fell below $2,800. The resulting liquidation of over 390,000 accounts showcases the volatility and risks associated with crypto trading.

Key Takeaways:

Bitcoin and Ethereum fell sharply, leading to a loss of around $2 billion in liquidation.
Over 390,000 accounts faced liquidation, with Bitcoin positions suffering the most.
Long positions saw damage of $1.78 billion, significantly more than short liquidations.
Macroeconomic factors played a role in the sudden market drop.
Large individual liquidations were reported, including significant losses by notable crypto holders.

Liquidations Create Turmoil for Traders

Recent reports confirm that more than 390,000 trading accounts were affected by rapid market fluctuations. A single noteworthy BTCUSD order on the Hyperliquid exchange reached a staggering $37 million, highlighting the intensity of the selling pressure. Bitcoin was especially hard-hit with approximately $962 million in BTC positions liquidated within just 24 hours, primarily from long positions which accounted for nearly $931 million of the losses. This demonstrates how concentrated the impact was among traders who were betting on rising prices.

Source: Coinglass

Market Trends: Long vs. Short Positions

The overall liquidations for long positions across the market totaled around $1.78 billion, compared to just $130 million for short positions. This upheaval followed a robust US jobs report that removed expectations for a rate cut in December, resulting in about $450 million in liquidations within a mere two-hour window. This unexpected news seems to have directly affected traders’ risk-assessment strategies.

Additionally, derivatives activity intensified the pressure as over $4.2 billion in crypto options were set to expire on that day. Approximately 39,000 Bitcoin options, estimated at around $3.4 billion, were on the line. The long-term put-call ratio remained at 0.52; however, increased put buying raised the 24-hour ratio to 1.36, indicating a surge in hedging strategies.

BTCUSD currently trading at $85,543. Chart: TradingView

The so-called "max pain" level for Bitcoin was noted to be approximately $98,000, soaring above current spot trading prices. Ethereum options also played a significant role, with over 185,000 contracts worth approximately $525 million set to expire. The put-call ratio for ETH shifted from 0.72 to 1.01 over the course of 24 hours, and the options' max pain level remained around $3,200, again above current trading prices of near $2,800.

The rapid sell-off was widespread. For instance, Solana saw drops of about 11%, landing around $126, while XRP fell more than 8% to roughly $1.91. Other cryptocurrencies like ASTER, HYPE, TNSR, DOGE, and ZEC also experienced declines, indicating a broad effect across the market.

#PeckShieldAlert Following $ETH‘s drop below $2,900, a whale (0x3ee3…42a6) was liquidated on their long $wstETH position. The position, which involved borrowing $USDC against $wstETH collateral, experienced a complete liquidation of $6.52 million.

Big Losses Among Significant Holders

Reports from on-chain monitors suggested severe losses among large holders, with entities like PeckShieldAlert noting individual liquidation amounts ranging from nearly $3 million to $6.5 million.

This Anti-CZ Whale just got liquidated in the market crash! Once a prominent figure with nearly $100 million in profit — now reduced to $30.4 million.

Lookonchain Tracking Major Accounts

The crypto analytics firm Lookonchain tracked accounts like "Machi," who suffered paper losses exceeding $20 million, with their remaining balance reported at just $15,530 after the volatility. Another notable account, the "Anti-CZ Whale," also faced substantial profit losses during this market shift.

Featured image from Unsplash, chart from TradingView