Bitcoin Plummets Below $65,000, Triggering $500 Million in Leveraged Liquidations: CoinGlass Data
By Ayesha Aziz
In a swift market move during early Asian trading hours on Monday, Bitcoin’s price dropped sharply from approximately $67,600 to $64,435, a decline of about 4.6% in under two hours. This sudden dip led to more than $505 million in leveraged liquidations across the cryptocurrency markets, according to data from CoinGlass.
Market Impact and Key Contributors
Bitcoin alone accounted for $232 million of the $505 million in liquidations, with Ethereum also heavily affected, contributing $126 million. Combined, these two major cryptocurrencies represented nearly 70% of total liquidated positions during the sell-off.
Underlying Causes: Policy Uncertainty and Geopolitical Tensions
Tim Sun, senior researcher at HashKey Group, explained that the sharp downturn was not triggered by any specific crypto-related event. Instead, broader macroeconomic and geopolitical factors played a pivotal role. One critical factor was the ongoing uncertainty around U.S. tariff policies paired with worsening geopolitical tensions, which have caused investors to reassess risk assets on a wide scale.
The U.S. Supreme Court recently ruled that former President Donald Trump’s reciprocal tariffs were illegal. However, Trump subsequently enacted a sweeping global tariff starting at 10%, later raised to 15%, adding to the climate of policy instability. This unstable backdrop weighed heavily on market sentiment entering the new week.
Macroeconomic Pressures Mounting
On the macro front, persistent inflationary pressures, particularly the sticky December Personal Consumption Expenditures (PCE) inflation data, and elevated crude oil prices — largely driven by tensions in the Middle East — have compounded market concerns.
Another important factor noted by Sun is the recalibration of expectations around U.S. Federal Reserve interest rates. Market data reflects a steep decline in the probability of a rate cut in March, dropping from roughly 10% last week to only 4% as of Monday. According to the FedWatch tool, there is now a 96% chance that the Federal Reserve will maintain interest rates at 3.50% to 3.75% at its upcoming Federal Open Market Committee (FOMC) meeting.
Shift Toward Safe-Haven Assets
Amid these uncertainties, investors have gravitated toward traditional safe-haven assets. Gold, for example, rose by 1.23% on Monday, reaching $5,166 per ounce. Conversely, cryptocurrencies suffered as they remain firmly positioned at the extreme end of the risk spectrum. Sun emphasized that institutional investors generally view crypto as a highly volatile and liquidity-dependent asset rather than a stable store of value. Consequently, crypto markets tend to face significant selling pressure whenever there is a broad contraction in risk appetite.
Outlook: Technical Recoveries Over Sustained Trends
Looking ahead, Tim Sun anticipates that any near-term price rallies in crypto are more likely to be technical recoveries rather than the beginning of a sustained upward trend. Persisting elevated uncertainty continues to keep many investors sidelined.
To support a durable crypto market recovery, Sun highlighted several prerequisites: easing inflation, declining energy prices, a reduction in geopolitical tensions, and stabilization in traditional equity markets. “If traditional risk assets remain under pressure, crypto is unlikely to rally independently,” he cautioned.
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About the Author:
Ayesha Aziz is a crypto writer and environmental scientist covering developments in the blockchain and cryptocurrency space.
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