Bitcoin Plunge Below $110K Triggers $524M Liquidation Carnage
Digital asset markets just got steamrolled.
The Domino Effect
When Bitcoin cracked that critical $110,000 support level, it set off a liquidation cascade that vaporized half a billion dollars in leveraged positions. Longs got absolutely crushed as margin calls hit traders who'd bet big on continued upside.
Blood in the Streets
The $524 million liquidation event represents one of the largest single-day flushouts since the last cycle's peak. Exchanges saw forced selling accelerate the downward spiral—classic crypto volatility doing what it does best.
Silver Linings Playbook
For veterans, these shakeouts create prime buying opportunities. The weak hands get washed out while fundamentals remain intact. Though Wall Street might clutch its pearls over such moves, this is just another Tuesday in crypto land.
Remember: the same leverage that creates these liquidations also fuels the epic rallies. Just another day where crypto proves it's the most efficient wealth transfer mechanism ever invented—from the impatient to the patient.
U.S.-China trade tensions prompt de-risking
The current downturn reflects an extended market-wide de-risking trend that began as the U.S.-China trade tensions escalated last week, triggering a historic leverage wipeout.
A sharp rise in bearish positioning has occurred over the past 24 hours, options analytics platform GreeksLive, posted in a tweet on Thursday.
"More than $1.15 billion, or about 28% of total options volume, has flowed into shallow out-of-the-money puts expiring this week and this month," the tweet stated. The concentrated activity in the $104,000 to $108,000 strike range signals that traders are actively hedging against further downside.
Options skew has turned significantly negative, the firm noted, suggesting that “options participants—particularly large liquidity providers—are pricing in substantial downside risk, with sentiment nearing that seen after the broader market drop on the 11th."
Market pessimism extends beyond derivatives.
On prediction market Myriad, launched by Decrypt's parent company DASTAN, users place only a 10% to 15% chance that Bitcoin, Ethereum, and solana will close Friday above $115,000, $4,200, and $210, respectively.
“I expect alt price action to be highly dispersed with some continue to bleed in the NEAR term amid fragile risk sentiment, whilst others higher-quality high-beta alts play catch up,” Shannon explained.
“It wouldn’t be surprising to see more choppy price action as leverage resets and capital consolidates around majors,” Cai noted, echoing the short-term uncertainty surrounding altcoins.
With fear dominating market sentiment and options traders betting on further declines, the path to recovery appears contingent on a de-escalation of trade war rhetoric and a return of stable institutional demand.
