Bitcoin Drops Below $74K as Liquidations Hit $855 Million

A Tough Sunday for Crypto Markets

Crypto markets experienced intense selling pressure late Sunday as a wave of forced liquidation wiped out hundreds of millions of dollars in leveraged positions. BitcoinBTC-0.69% slipped below the $74,000 mark and touched $73,708, registering its lowest price point since August. Meanwhile, EthereumETH-4.12% also felt the heat, dropping down to $2,100.

According to data from analytics platform CoinGlass, total crypto liquidations reached an overwhelming $855.69 million over a 24-hour period. More than 140,000 individual traders had their positions automatically closed by exchanges. A staggering 90.2% of these wiped-out trades were long positions, meaning the vast majority of traders were betting on prices to rise before the market suddenly turned against them.

Past performance of digital assets is not a guarantee of future performance or results. You can track live market rates anytime at bitkub.com/th/market/BTC.

Understanding Liquidations: Why Did It Hurt So Badly?

To understand why this selloff happened so quickly, it helps to know how leveraged trading works. Think of trading with leverage like buying a house with a tiny down payment and borrowing the rest from a bank.

When traders use high leverage, even a small drop in price can trigger an automatic sale by the exchange to prevent further losses. This automatic sale is called a liquidation. When thousands of positions get liquidated simultaneously, it creates a domino effect: liquidations cause prices to drop further, which then triggers even more liquidations. That is exactly what unfolded over the weekend.

4 Major Warning Signs Behind Bitcoin's Decline

Market analysts point out that this market correction is not just about over-leveraged day traders. Four major factors suggest that Bitcoin's current challenges are tied to broader market dynamics.

1. Bitcoin Fell Below Short-Term Holder Support

Data from Glassnode reveals that Bitcoin has fallen below its short-term holder cost basis, which sits near $75,700. The short-term holder cost basis represents the average purchase price for investors who bought Bitcoin within the last 155 days.

When the market price falls below this average, recent buyers suddenly find their portfolios sitting at a loss (or underwater). Imagine buying a product for $100 and watching its market price drop to $80 overnight. Many investors feel nervous in this situation and may choose to sell to cut their losses, adding extra selling pressure to the market.

2. Institutional Investors Are Withdrawing Funds from ETFs

Selling pressure is not just coming from retail traders on derivatives exchanges. Large institutional investors are also scaling back their exposure.

US spot Bitcoin exchange-traded funds (ETFs) recorded approximately $1.28 billion in net outflows last week alone. On Friday, investors withdrew $411.9 million in a single day. A major portion of that came from BlackRock's IBIT fund, which experienced $403 million in net outflows. This shows that institutional capital is taking a step back during this period of uncertainty.

3. Spot Market Buyers Are Hesitant

In a healthy crypto market, when prices drop, buyers in the spot market (people buying real Bitcoin to hold) step in aggressively to buy the dip. However, analysts note that spot buyers have been noticeably quiet recently.

Instead of real spot demand, recent mini-recoveries were mostly pushed up by risky futures trades. When market sentiment turned negative on Sunday, those fragile futures positions collapsed quickly without strong spot buying to hold up the price.

4. Outside Economic and Political Pressures Are Building Up

Crypto does not trade in a bubble. External global events have added weight to investor sentiment across all markets:

• Wall Street Selloff: The tech-heavy Nasdaq index dropped 5.5% on Thursday due to investor concerns over high artificial intelligence (AI) valuations and tech regulation.
• US Political Shifts: Recent victories by Democrats in the US midterm elections have raised questions regarding future legislative frameworks for digital assets.
• Security Concerns: Sentiment was also impacted by news surrounding a major $6 billion hack involving Binance, which weakened market confidence.

What Happens Next? Key Price Levels to Watch

As the new trading week begins, market participants are keeping a close eye on several technical levels to gauge where Bitcoin might head next depending on incoming market conditions.

• Bullish Scenario: If institutional ETF flows turn positive again and spot buying demand returns, Bitcoin would need to reclaim the $75,700 level. A successful push above that could open the door toward the $77,000 to $80,000 resistance range to rebuild momentum.
• Bearish Scenario: On the other hand, if ETF outflows persist and weakness in global stock markets continues, Bitcoin may face further downward risk, bringing the $70,000 support level into focus.

The reopening of Wall Street on Monday and the incoming ETF capital flow reports will offer key signals on whether the current selloff calms down or continues.

Keeping a Balanced Perspective

Navigating sharp market corrections can be stressful, but understanding the underlying factors—such as leverage liquidations, ETF flows, and macroeconomic trends—helps put short-term price movements into context.

Digital asset investments carry high market volatility. Investors should always evaluate their personal risk tolerance, perform thorough research, and maintain a long-term perspective when managing their investments.