Bitcoin News Today: Bitcoin's $20B Liquidation: Market 'Cleanse' or Unseen Structural Collapse?

Bitcoin remained near three-week lows following a record $20 billion liquidation event, with traders warning that the market's bottom has not yet been reached. Key data from CoinGlass and Cointelegraph Markets Pro indicated that long positions dominated the liquidations, with total losses likely exceeding the reported figure due to exchange reporting limitations. The S&P 500 closed down 2.7% on Friday, while gold rose above $4,000 per ounce, reflecting broader risk-off sentiment Cointelegraph^[1].

Bitcoin's relative strength index (RSI) reached oversold levels not seen since the February trade war escalation, and order-book liquidity showed a severe imbalance, with resistance clustered around $120,000 and minimal support near $100,000 Cointelegraph^[1]. Trader Skew noted that short positions were rolling off, and major exchanges like Binance and Coinbase faced challenges in maintaining liquidity during the volatility. Meanwhile, fellow trader Roman emphasized that the market was entering a "cleanse" of bull-market euphoria, citing over 30 million altcoins as "scam projects" and Bitcoin's 700% rally from its macro low Cointelegraph^[1].

The liquidation event was triggered by escalating U.S.-China trade tensions, with President Donald Trump's announcement of 100% tariffs on Chinese imports spooking markets. This triggered a 10% drop in Bitcoin to $107,000 and over 15% declines in Ethereum and other altcoins. Over 1.66 million traders were liquidated within 24 hours, erasing $19.33 billion in positions, according to CoinGlass data TradingView^[3]. The sell-off accelerated after Trump confirmed the tariffs, with Bitcoin briefly dipping below $102,000 later that evening TradingView^[3].

Market analysts highlighted structural weaknesses in leveraged positions and synthetic token markets, with stablecoins like USDE and WBETH depegging on Binance during the turmoil. Binance's futures insurance fund deployed $188 million to stabilize leveraged contracts, underscoring the scale of the crash Coinfomania^[4]. Despite the volatility, Bitcoin remained above its 200-day simple moving average ($106,800) and the STH cost basis ($114,000), suggesting the bull market remains intact Coinfomania^[4].

The liquidation event also exposed vulnerabilities in centralized price oracles, which failed to handle the sharp price dislocations. While blockchains themselves remained stable, the incident raised questions about the resilience of derivatives and DeFi platforms during extreme market conditions Coinfomania^[4].

Traders and analysts remain cautious, with some predicting further declines as the market digests macroeconomic risks. The TimeValue indicator suggested a potential bottom, but institutional investors are likely accumulating during the downturn, mirroring patterns seen in prior corrections Coinfomania^[4]. With Bitcoin's dominance rate at 58.36% and the altcoin market cap near $1.15 trillion, the market remains in a transitional phase, balancing bearish corrections with long-term bullish fundamentals .