Crypto Bloodbath: $1.5B Liquidations Spark Bear Market Fears

Crypto liquidations surged past $1.5 billion in the last 24 hours, fueling fears of a bear market. This marks the third time this month that market liquidations have exceeded the billion-dollar mark in a single day. Despite the grim outlook, analysts remain optimistic about the crypto market's long-term prospects, predicting a potential consolidation and resurgence by mid-2025.

Bitcoin, the largest cryptoasset, has been the epicenter of these liquidations, with its price falling below $90,000 for the first time in over three months. The large-scale outflows from Bitcoin ETFs, reflecting a retreat from institutional investors, have contributed to the asset's decline. However, it is not the only cryptoasset feeling the heat. Ethereum, the second-largest cryptoasset, has also witnessed significant liquidations, partially due to the fallout from last week's Bybit hack.

The crypto market has experienced four major liquidation periods in the past three months, driven by various macroeconomic factors. Although the market has swiftly recovered each time, the frequency of these liquidations is a cause for concern. The fear and greed index has been volatile, with market sentiment currently at its lowest point in 2025.

Not all industry participants are bearish, however. Binance CEO Richard Teng believes that these developments are a tactical retreat rather than a reversal. He encourages investors to focus on the industry's fundamentals and remember its cyclical nature. Despite the liquidations, the crypto industry's political movement and institutional interest remain strong. As the dust settles, the crypto community may find itself consolidated and poised for even larger gains.