Bitcoin News Today: Bitcoin Tumbles 5.6% as $1 Billion in Crypto Liquidations Trigger Market Turmoil

The cryptocurrency market is experiencing heightened volatility, with liquidation events surging past $1 billion in the past 24 hours. The bulk of the liquidations—exceeding $766 million—stem from long Ethereum (ETH) positions, according to Coinglass data [1]. Meanwhile, Bitcoin (BTC) has dropped sharply from $124,000 to approximately $117,000, drawing attention from market analysts and traders.

The recent price movements may be partly attributed to the Producer Price Index (PPI) data and the lingering CME gap closure. The week began with Bitcoin above Friday’s CME closing price, but the trend reversed as the price dipped toward $117,000 [1]. Analyst Quinten Francois views the move as a short-term correction aimed at closing the CME gap, with optimism for a resumption of upward momentum. He supports his argument with a chart published on August 11, aligning with his previous forecasts [1].

However, not all analysts are as optimistic. Altcoin Sherpa warns that while a V-shaped recovery is being discussed, the market remains unpredictable until the daily candle closes. Historically, prices rarely reverse entirely in a V-shape and often experience pullbacks after major liquidation events [1]. The current situation suggests a similar pattern could emerge, prompting traders to monitor the market closely.

The liquidation spike came after the U.S. PPI data release, indicating a long-biased tendency in market positioning. Despite significant ETH liquidation, the $4,500 support level remains intact, providing some relief to investors [1]. The Bitcoin Market Dominance trend shows a continued shift in favor of altcoins, with several major altcoins outperforming Bitcoin. Analyst DaanCrypto highlights this shift in a recent chart, noting that the decline in BTC.D mirrors patterns observed in previous market cycles [1].

In the altcoin space, Theta Coin (THETA) has drawn attention due to a partnership with Ligue 1 Football Club Olympique Marseille. The club introduced an AI-powered smart mascot, positioning itself at the intersection of sports and blockchain technology. Despite this development, the price of THETA has not shown significant movement, with Poppe expressing confidence in its upside potential [1].

Earlier in July, the market faced a massive liquidation event totaling $5.01 billion, impacting over 117,380 traders. This marked one of the largest liquidation events in recent history, emphasizing the systemic risks posed by leveraged positions [3]. The speed and magnitude of the current liquidations suggest a market still grappling with the lingering effects of overleveraging and concentrated exposure.

The volatility is not confined to traditional cryptocurrencies. Solana-based meme coins, including Fartcoin, have surged more than 9% in a single day [5]. While these tokens are largely speculative and lack fundamental value, their performance reflects a broader risk-on sentiment in the crypto market. This trend is driven by the overall rally in altcoins and the continued outperformance of many tokens relative to Bitcoin.

Market observers, particularly in Kenya, have noted the increasing speed and unpredictability of liquidation events. Traders, even those with experience in volatile markets, are struggling to adapt to the rapid shifts in asset prices and leverage dynamics [4]. This raises concerns about the sustainability of current leverage levels and the need for more robust risk management practices.

The cascading effect of liquidations can amplify price swings, creating a self-reinforcing cycle where falling prices trigger further liquidations, which in turn drive prices lower. This dynamic has been observed in previous market cycles and is likely to persist unless there is a structural shift in how traders and platforms manage risk. The coming weeks will be critical in determining whether this is a temporary correction or a more profound shift in market behavior.

The market remains highly sensitive to macroeconomic data and price movements in major assets like Bitcoin and Ethereum. As traders and platforms adjust to the evolving landscape, the focus will remain on how quickly the market can stabilize—or whether further turbulence is on the horizon.

Source:

[1] Cryptocurrency Market Faces Turbulence as Major Liquidation Looms (https://coinmarketcap.com/community/articles/689e22c8bcb5e03461a18f7a/)

[3] Surviving Crypto Tsunami 5 Billion Liquidation (https://cryptorobotics.ai/az/news/news-report/surviving-crypto-tsunami-5-billion-liquidation/)

[4] Why the Crypto Market Faced a Sudden Downturn (https://www.facebook.com/groups/28153****521732/)

[5] Fartcoin has soared past $1 (https://coinalyze.net/fartcoin/usdt/bybit/fartcoinusdt/price-chart-live/)