Major cryptocurrency decline triggers massive liquidations
Bitcoin and major altcoins started the week with significant losses, wiping out gains from earlier sessions. The decline pushed Bitcoin below pre-FOMC levels, with the sharpest drop occurring during Sunday night trading. Bitcoin fell 2.4% to around $113,000, while Ethereum dropped 6.3% to approximately $4,190. Other major cryptocurrencies followed suit, with XRP down 6.3% to $2.80 and Solana declining 6.6% to $224.
This market movement appears connected to shifting expectations around interest rate cuts and general investor caution toward riskier assets. The uncertain macroeconomic environment seems to be making traders more hesitant, perhaps waiting for clearer signals before committing to positions.
Leveraged positions face brutal liquidation wave
The sudden price drop triggered massive liquidations across cryptocurrency markets. According to Coinglass data, leveraged positions worth $1.7 billion were liquidated within 24 hours. The overwhelming majority—$1.61 billion—came from long positions betting on price increases, while short positions accounted for only $85.9 million in liquidations.
Ethereum led the liquidation totals with $493.4 million, followed by Bitcoin at $283.9 million. Solana saw $95.4 million in liquidations, and XRP experienced $78.9 million. Analysts noted that these conditions frequently occur during Sunday night sessions when market liquidity tends to be thinner, making price movements more volatile.
Analyst perspectives on market sentiment
BTC Markets analyst Rachael Lucas suggested that the Bitcoin bull run might be reaching its final stages, prompting investors to adopt a more cautious approach. She observed that the strong upward trend from earlier this year has subsided, with short-term investors appearing particularly concerned about recent price action.
However, Lucas also noted some positive signs in the market behavior. The absence of a major sell-off suggests that overall sentiment remains closer to anxious optimism than outright fear. Long-term investors don’t seem to be panic selling, which might indicate underlying confidence in the market’s fundamentals.
“Investors are cautious,” Lucas explained, “but long-term holders aren’t panicking and not engaging in panic selling. Short-term investors are uneasy though.” She pointed to on-chain data showing that investors aren’t actively selling their holdings, which supports the nervous optimism interpretation.
Market outlook remains uncertain
Despite the bearish short-term outlook, Lucas suggested this decline might represent a pause rather than a full reversal into bear market territory. She noted that long-term investors continue holding their investments, waiting for Bitcoin to break above $124,000 to potentially trigger the next rally phase.
The cryptocurrency market’s sensitivity to macroeconomic factors and liquidity conditions remains evident. While the recent decline has caused significant pain for leveraged traders, the underlying holding patterns suggest the market structure might be healthier than the price action indicates. The coming days will likely provide clearer signals about whether this is a temporary correction or the beginning of a more sustained downturn.
