Bitcoin Sees $2.56 Billion in Liquidations Amid Crypto Market Volatility

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TLDR

Bitcoin experienced $2.56 billion in liquidations due to recent crypto market volatility.
The sell-off in Bitcoin positions was driven by broader risk-off sentiment affecting equities and precious metals.
Bitcoin prices fell sharply from a record high above $126,000 to as low as $104,782.88.
External factors such as disappointing earnings from Microsoft contributed to investor concerns and market downturns.
Analysts note that the crypto market has become increasingly sensitive to external economic and geopolitical developments.

Recent crypto market volatility has led to liquidations of $2.56 billion in Bitcoin positions. According to CoinGlass, the sell-off was triggered by a broader market downturn that included equities and precious metals. Bitcoin, known for its volatility, has taken a major hit in recent days, marking a significant loss in value after reaching record highs earlier.

The wipeouts have affected both short and long Bitcoin positions, demonstrating how sensitive the market has become. Analysts believe that the downturn was caused by various factors, including rising concerns over the AI trade and the announcement of Kevin Warsh as the potential nominee for the Federal Reserve’s chair. This combination of factors has pushed the crypto market into a risk-off environment, fueling the sell-off.

Crypto Market Volatility Intensifies Bitcoin Liquidations

The latest liquidation of $2.56 billion in Bitcoin positions highlights the cryptocurrency market’s extreme volatility. Analysts have noted that this was a result of widespread risk aversion, affecting both traditional financial markets and crypto. Bitcoin, which had reached a high above $126,000 in recent weeks, dropped sharply during the October 10-11 period, reaching lows of $104,782.88.

This drastic dip reflects the broader crypto market’s sensitivity to risk-off sentiment. “What we’ve seen the last few months is probably people taking a step back while they reassess their risk frameworks,” said Adam McCarthy, a senior analyst at Kaiko. Bitcoin’s volatility has made it highly reactive to external shocks, such as economic news or geopolitical developments, further amplifying market movements.

Pressures from Broader Market Factors

The downturn in Bitcoin prices is not only attributed to the crypto market but also to external factors. A sharp decline in precious metals, like gold and silver, occurred after President Trump announced his Fed chair nominee. This sell-off was compounded by poor earnings from tech giants, such as Microsoft, which fueled investor concerns about AI spending.

The news also coincided with expectations that Warsh would shift monetary policy towards tighter balance sheets and possible rate cuts. These moves caused a broader market pullback that further pressured Bitcoin’s price. With thin weekend liquidity, the market experienced additional volatility, which exacerbated downward price movements, according to Bitfinex analysts.