Bitcoin Drops Below $80K, Triggers $700M in Liquidations as Altcoins Suffer Heavy Losses

A brutal wave of liquidations rocked the crypto market as Bitcoin (BTC) tumbled 4.5% below $80,000, sparking a cascade of sell-offs across major altcoins. Ether (ETH) and Dogecoin (DOGE) took the biggest hit, each plummeting 9% in the past 24 hours.

The sharp downturn led to a staggering $700 million in long positions being wiped out, with BTC bulls suffering $420 million in liquidations, followed by $150 million in ETH longs and $30 million in DOGE long positions. Meanwhile, Solana (SOL) lost 8%, XRP dropped 7%, and the broader CoinDesk 20 Index (CD20) shed over 6.5%.

Traders Caught Off Guard as Leverage Unwinds

As crypto prices nosedived, leveraged traders were forced to unwind positions, sending Bitcoin futures open interest down 7% to $45 billion—a sign of widespread margin calls and position exits.

“Risk appetite is fading as the Federal Reserve remains firm on delaying rate cuts,” said Nick Ruck, director at LVRG Research. “Stronger-than-expected jobs data and expectations of a hotter-than-anticipated inflation report have traders moving to the sidelines.”

With market uncertainty mounting, Ruck noted that many investors are waiting for a clearer signal from the Fed before re-entering risk assets like crypto.

Broader Market Sell-Off Weighs on Crypto

Bitcoin’s drop coincided with a sharp downturn in U.S. equities, as the S&P 500 lost 2% and the Nasdaq fell 3%, marking the worst single-day decline since September 2022. The ‘Magnificent 7’ tech stocks collectively erased $830 billion in market capitalization, driven by renewed recession fears and uncertainty over U.S. trade policies.

A stronger U.S. dollar and hawkish Fed commentary—signaling fewer rate cuts in 2025—have further pressured speculative assets. Meanwhile, investors are flocking to traditional safe havens, with gold and the Japanese yen rallying amid market turbulence.

Is a Short-Term Rebound Possible?

Despite the steep losses, some analysts believe the sell-off could pave the way for a relief bounce. The Crypto Fear & Greed Index has plunged to 15, deep in the “extreme fear” zone, historically a level that precedes a short-term market recovery.

Singapore-based QCP Capital highlighted potential bullish signals, particularly in bond markets.

“Despite the panic selling, we’re seeing 10-year Treasury yields dip by 60 basis points, which could weaken the U.S. dollar—a positive sign for risk assets like Bitcoin,” QCP noted in a Tuesday market update.

“Additionally, lower yields could ease some pressure on the U.S. government’s borrowing costs, especially as fiscal policy under Trump’s proposed economic agenda takes shape,” the firm added.

While the near-term outlook remains uncertain, traders are closely monitoring bond yields and dollar strength for signs of a shift in sentiment that could stabilize Bitcoin and the broader crypto market.