Bitcoin Sees Decline Below $90k Amid $708.9 Million in Crypto Liquidations

Bitcoin experienced a significant decline below the $90,000 mark on January 21, amid a broader market pullback influenced by mass liquidations in the crypto derivatives market. Leveraged long positions were primarily affected, with total liquidations surpassing $708 million.

Key Takeaways

Bitcoin dropped to approximately $89,162, closing the session around $89,368, down about 1.9%.
Total liquidations in the crypto market reached $708.88 million in just 24 hours, with long positions being the most affected.
The Relative Strength Index (RSI) fell to -33.7, indicating weakening momentum.
A significant number of traders—**166,432—**were liquidated during this period.
Traders are closely monitoring price levels to see if Bitcoin can reclaim the $90k threshold.

Bitcoin 12-hour price trend

Bitcoin drops below $90k as $708.9m crypto liquidations hit leveraged longs

Market Dynamics: Long Liquidations Drive the Sell-off

Recent data reveals that the recent market downturn was primarily driven by the liquidation of long positions. According to figures from CoinGlass, the total liquidations amounted to $708.88 million in the past 24 hours, with $648.78 million coming from long positions and $60.09 million from shorts.

Crypto market liquidation chart

This trend continued over the previous 12 hours, where liquidations totaled $466.40 million, with longs again taking a significant hit at $422.68 million compared to $43.72 million from shorts. CoinGlass also reported that 166,432 traders were liquidated during this timeframe, indicating a significant shift in market positions. This kind of liquidation imbalance suggests that traders positioned themselves for market continuation or rebound, but were caught off guard as prices declined sharply.

Bitcoin's Market Position Amidst Key Levels

As Bitcoin trades below the $90,000 mark, traders are now focusing on whether the price can quickly recover to this crucial psychological level or if sellers will persistently defend it during any potential rebound. The current market conditions depict a fragile phase, as reflected by the combination of the price drop and the RSI near the low-30s.

While upward bounces can occur, they tend to be more volatile and are particularly sensitive to market sentiment driven by news and funding positions. Despite the volatility, the most evident signal from the current data is the aggressive deleveraging within the market. This trend may alleviate short-term sell pressure if the wave of forced liquidations starts to slow down.

Conclusion

The recent decline in Bitcoin's price below $90,000 highlights the volatility and unpredictability of the crypto market, especially amid significant liquidations. Traders are advised to stay vigilant and closely monitor market movements for signs of potential recovery or further declines.