Bitcoin price drops below $100K, $400M liquidated as altcoins take a hit
A sudden $5,000 drop in Bitcoin's price within less than an hour led to mass liquidations of long trader positions. The decline occurred roughly 24 hours after Bitcoin reached the $103,000 level and caused a ripple effect impacting most altcoins, some of which experienced even greater losses.
According to CoinGlass, over 130,000 positions were liquidated, with the total liquidation amount exceeding $400 million in the last 24 hours. The most intense liquidation activity occurred in the past 4 hours, with $246 million in positions liquidated, including $223 million in long positions.
Over the past 24 hours, Bitcoin has dropped nearly 5% and was trading around $97,150 at the time of writing. Ethereum followed suit, losing 6.5% and falling below $3,450.
Bitcoin price dynamics over 24 Hours. Source: CoinMarketCap
Many traders were unprepared for this sharp movement. According to CoinGlass, Ethereum long positions ($48.5 million) topped the 4-hour liquidation chart, followed by Bitcoin longs at $47.6 million.
Dogecoin ranked third in liquidations ($10.5 million), followed by XRP ($6.8 million) and Solana ($6.5 million). The largest single liquidation on January 7 was recorded on Binance, involving an ETH/USDT trade worth $11.94 million.
The nearly 5% drop in XRP's value, as reported by CoinMarketCap, pushed the cryptocurrency to fourth place in market capitalization rankings, with Tether reclaiming the third spot.
Large purchases drive high volatility
Analysts attribute the current market correction to institutional influence from large Bitcoin purchases. Yesterday, MicroStrategy acquired 1,070 BTC for $101 million, sparking another wave of excitement and pushing Bitcoin above the $100,000 mark once more.
However, when such support failed to materialize the following day, Bitcoin retreated to $97,400, triggering a wave of liquidations among high-leverage positions. This market behavior highlights significant volatility and underscores the need for traders to remain cautious and take preventive measures.
Bitcoin price has surged into the new year, gaining 10% in the first few days of January 2025 to reclaim the $102,000 level.
This remarkable recovery has reversed nearly all losses sustained since mid-December 2024. However, with the price now nearing overbought levels, questions linger about whether the rally can hold.
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