Bitcoin, the bellwether of the cryptocurrency market, has once again shown its notorious volatility, dipping below the $104,000 mark amid heightened global uncertainty. The correction triggered a cascade of over $600 million in leveraged position liquidations, marking the highest daily wipeout since February 2025.
The drop shocked many retail and institutional investors, coming after weeks of steady accumulation and optimism that BTC would break past its recent highs. Instead, the market witnessed a brutal reversal that wiped out bullish momentum and reminded traders of crypto’s unforgiving nature.
What’s Behind the Decline?
According to analysts from CoinDesk and other financial outlets, the sell-off was not purely technical. Geopolitical tensions—especially the resurgence of U.S.-China trade disputes—have rattled global markets and contributed to a broader “risk-off” mood. Equity markets also dipped, with the S&P 500 and tech-heavy Nasdaq showing weakness as investors flee from volatile assets into cash and short-term government bonds.
In the crypto sphere, this sentiment translated into panic selling and rapid liquidations. Leveraged traders bore the brunt, as funding rates had crept too high, and the sudden pullback created a domino effect across major exchanges. The data shows that over $600 million in long positions were liquidated within 24 hours—a figure not seen since the February mini-crash.
Market Sentiment Turns Bearish
Before the correction, Bitcoin had been hovering between $106K and $110K, consolidating with relatively low volatility. However, on-chain data showed a significant rise in exchange inflows by whales and miners—a typical precursor to a potential selloff. Glassnode reported that short-term holders had started offloading coins at a loss, reinforcing bearish pressure.
Moreover, funding rates flipped negative on platforms like Binance and Bybit, signaling a major sentiment shift. Fear and Greed Index, which had been in the “Greed” zone for weeks, dropped sharply to “Neutral,” hinting at rising investor anxiety.
Broader Implications
The crypto market’s correlation with macroeconomic and geopolitical developments continues to grow. As long as global financial markets remain shaky, Bitcoin and altcoins may remain under pressure.
However, some analysts view this correction as a healthy reset. “Corrections are part of the cycle,” said Marco Santos, senior analyst at ChainStrategy. “This flush clears out excessive leverage and sets the stage for more sustainable growth.”
What’s Next?
Bitcoin currently hovers in the $102K–$104K range, with key support around $100K and psychological resistance at $110K. A clean break below $100K could trigger further liquidations, but if bulls defend the zone, BTC could consolidate and prepare for a fresh rally.
Investors are now watching for signs of resolution in the U.S.-China tensions and clues from the Federal Reserve’s next interest rate decision. In the meantime, caution is the name of the game.
