Bitcoin’s Sudden Decline Triggers Massive Liquidations: Over $500 Million Wiped Out in Hours

Bitcoin’s Sudden Plunge Triggers $500 Million in Liquidations

In a dramatic turn of events, Bitcoin experienced a sharp decline on Monday, plummeting from $67,600 to $64,435 in just two hours. This swift drop triggered a wave of liquidations across the cryptocurrency market, resulting in over $505 million wiped out from leveraged positions, according to CoinGlass data.

The leading cryptocurrency’s decline accounted for approximately $232 million in liquidations, while Ethereum contributed an additional $126 million, highlighting the vulnerability of major crypto assets in the current market climate. As of now, Bitcoin is trading at around $66,280, reflecting a 2.7% decrease for the day.

Tim Sun, a senior researcher at HashKey Group, explained that the downturn was not the result of a sudden “black swan” event or unexpected negative news. Instead, it stemmed from ongoing policy uncertainties related to U.S. tariff policies and rising geopolitical tensions. “These factors forced the market to reprice risk assets,” Sun noted.

The backdrop of this selloff includes a recent ruling by the U.S. Supreme Court declaring President Donald Trump’s “reciprocal” tariffs illegal. Despite this, Trump has moved forward with a sweeping 10% global tariff, further complicating the economic landscape.

The selloff underscores Bitcoin’s sensitivity to macroeconomic uncertainties, as risk assets are being repriced amid fluctuations in tariff policies and geopolitical tensions, rather than due to crypto-specific catalysts.

Market sentiment appears to be shifting, with users on the prediction market Myriad assigning a 37% chance that Bitcoin’s next move will see it rise to $84,000. This probability has dropped nearly 10% from a peak of 46.4% just a day prior, reflecting growing pessimism among investors.

Sun pointed to a confluence of pressures affecting the market, including persistent inflation data, rising crude oil prices due to Middle East tensions, and a shift in interest rate expectations. The FedWatch tool indicates that markets have repriced rate-cut expectations from 90% last week to 96% as of Monday, suggesting that the Federal target rate is likely to remain unchanged at 3.50% to 3.75% in the upcoming Federal Open Market Committee meeting.

“In an environment defined by policy uncertainty, sticky inflation, and geopolitical risk, risk appetite has contracted significantly,” Sun explained. “Assets with high volatility and high liquidity dependence were the first to face pressure, driving the broad correction in risk assets.”

Looking ahead, Sun anticipates limited inflows into the market and a prolonged bottoming process due to the increased uncertainty that has dampened the willingness of sidelined capital to enter. He cautioned that any potential bounces in Bitcoin’s price are likely to be “technical recoveries” rather than sustained trend reversals.

For a crypto market rebound, Sun emphasized the importance of a convergence of positive macro signals, including inflation trends, energy prices, geopolitical developments, and stability in traditional risk assets. “If traditional risk assets remain under pressure, crypto is unlikely to rally independently,” he added, highlighting that a stabilization in stocks is a prerequisite for any potential recovery in the cryptocurrency market.