TL;DR
- Over the past 24 hours, more than $827 million in long positions have been liquidated as Bitcoin fell below the critical $80,000 mark.
- The sharp decline from $86,000 to $78,711 triggered a domino effect in the markets, forcing traders to close positions due to margin calls.
- Analysts suggest that the reduction in leverage could mark a turning point for Bitcoin’s recovery if key support levels hold.Â
The cryptocurrency market has faced one of its most turbulent sessions of the year, with Bitcoin plunging to lows of $78,000, triggering over $827 million in long position liquidations. This sharp adjustment has shaken investor confidence, but some experts see this scenario as a buying opportunity before a potential rebound, especially if institutional demand increases and macroeconomic conditions become more favorable in the coming weeks. Â
According to data from Coinglass, over 228,000 traders were affected by the liquidations, significantly reducing the market’s leverage levels. The selling pressure intensified after Bitcoin broke below the crucial $85,000 support level, causing a cascade of forced sell orders. While these corrections increase short-term uncertainty, they have historically helped eliminate “weak hands” and strengthen long-term investor positions. Â
The impact wasn’t limited to Bitcoin. Other major cryptocurrencies, including Ethereum and Solana, also suffered significant losses, with ETH hitting an annual low and seeing millions in liquidations. The sell-off also affected trading volumes on derivatives platforms, suggesting a temporary decline in speculative interest. However, some analysts believe that this leverage wipeout could pave the way for a more sustainable recovery in the coming weeks. Â
Market Crash or a New Buying Opportunity?
Despite the great panic in the markets, some analysts argue that this leverage purge could be beneficial for the crypto ecosystem. Lower leverage levels allow for a more stable recovery, reducing the risk of further liquidations in case of price rebounds. Â
Ethereum also saw significant losses, hitting a yearly low with over $217 million in liquidations. However, similar corrections in the past have often been followed by strong recoveries, especially during bullish cycles. Â
From a technical perspective, indicators such as the RSI entering oversold territory and the MACD turning negative suggest that the market might be nearing a point of seller exhaustion. If Bitcoin manages to stabilize within the $75,000-$78,000 range, some analysts predict a rebound towards the $90,000 level in the coming weeks. Â
While fear grips some investors, seasoned traders see this drop as a fresh opportunity to position themselves before the next major upward move.