Bitcoin Plunges Below $65K, Triggering $500 Million in Leveraged Crypto Liquidations
Data from CoinGlass Highlights Significant Market Turbulence Amid Global Uncertainties
In a sudden market downturn early Monday during Asian trading hours, Bitcoin’s price fell sharply by approximately 4.6%, sliding from $67,600 to $64,435 in less than two hours. This price drop ignited more than $505 million in leveraged liquidations across cryptocurrency markets, according to data from CoinGlass.
Bitcoin and Ethereum Lead Liquidations
Out of the total liquidations, Bitcoin alone accounted for $232 million, while Ethereum represented $126 million. Together, these two cryptocurrencies comprised nearly 70% of the total market liquidations, underscoring their continued dominant role in the crypto ecosystem.
Context of Market Movements
Tim Sun, a senior researcher at HashKey Group, explained that the rapid price decline was not triggered by a crypto-specific event. Instead, it was driven by broader market concerns, including policy uncertainty linked to U.S. tariff changes and escalating geopolitical tensions. These factors have led markets to broadly reprice risk assets, which heavily impacted the crypto sector.
The political backdrop includes the recent U.S. Supreme Court ruling declaring President Trump’s "reciprocal" tariffs illegal. Yet Trump has responded by imposing a sweeping 10% global tariff, later increased to 15%, prolonging uncertainty around trade policies. This ongoing policy instability has weighed heavily on investor sentiment heading into the week.
Macro Factors Weighing on Sentiment
Additional macroeconomic issues contributing to market unease include persistent inflation pressures evidenced by December’s Personal Consumption Expenditures (PCE) data, elevated crude oil prices driven by Middle East tensions, and diminished expectations around Federal Reserve interest rate cuts.
According to the FedWatch tool, the probability of a Federal Reserve rate cut in March has dropped sharply from around 10% last week to just 4% at the start of this week. This change indicates a 96% likelihood that the Federal Reserve will keep rates steady between 3.50% and 3.75% at the next Federal Open Market Committee (FOMC) meeting.
Shift Toward Traditional Safe-Haven Assets
As risk assets including cryptocurrencies experienced downturns, capital flows moved toward traditional safe-haven investments. Gold prices rose 1.23% on Monday, reaching $5,166 per ounce. This contrasts with crypto, which continues to be perceived by institutional investors as a high-volatility, liquidity-dependent asset rather than a stable store of value.
Sun noted that crypto’s positioning at the “far end of the risk curve” means it is particularly vulnerable to broad contractions in risk appetite, often resulting in accelerated selling pressure during uncertain times.
Outlook for Crypto Markets
Looking forward, Sun cautioned that any short-term rebounds in crypto prices are more likely to be technical recoveries rather than the beginning of sustained upward trends. He emphasized that sidelined capital remains hesitant to enter markets amid elevated uncertainties.
For a durable crypto recovery, Sun identified several necessary conditions: cooling inflation rates, easing energy prices, reduced geopolitical risk, and stabilization within traditional equity markets. “If traditional risk assets remain under pressure, crypto is unlikely to rally independently,” he said.
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About the Author:
Ayesha Aziz is a crypto writer and environmental scientist with a focus on market analysis and emerging trends within digital assets.
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