Bitcoin plunges below $82,000, erases its annual gains, triggering nearly $2 billion in liquidations, amidst a market dominated by panic.
Bitcoin erases its annual gains
Bitcoin once again lost ground, flirting with $82,000 and plunging the entire market into a turmoil that many had not experienced since the end of 2022. The mechanism is brutal: liquidation after liquidation, domino effect on altcoins, capitulation of retail traders, and a rapidly spreading sense of panic. For a less experienced reader, a simple marker suffices: in just a few hours, nearly $2 billion of forced positions were wiped out. It’s a massive clean-up particularly impacting leveraged traders.
Altcoins endure the shock
Ethereum falls below $2,700 with a weekly loss of over 14%. Solana retreats by more than 12% in a day. XRP, BNB, and DOGE experience declines ranging from 12 to 15%. From the November highs, large caps erase between 20 and 35% of their value. The small caps, meanwhile, are being decimated. Volatility moves downwards and no sustainable recovery zone emerges.
Massive liquidations and forced positions
Nearly 396,000 traders were liquidated within 24 hours. Just on Bitcoin: $1 billion. On Ethereum: over $400 million. Altcoins complete the bloodbath. The largest liquidated order reaches $36.7 million on Hyperliquid. This level of activity underscores that the market largely relies on leveraged positions, highly sensitive to the slightest fluctuation.
The macro weighs heavily on the market
Global stocks declining
Traditional markets are not acting as a buffer. Global stocks see their worst week in seven months, with the MSCI All Country World Index dropping by over 3%. US tech remains under pressure as AI-related valuations start to cause concern. Investors retreat to Treasuries, a classic signal of a flight to safety.
Capital flight and bleak sentiment
American Bitcoin ETFs experience over $900 million in net outflows in a single day, their second worst session since 2024. Perp open interest drops by 35% from the October peak, a direct consequence of a market losing its liquidity. The Crypto Fear and Greed Index plummets to 11, a level of ‘extreme fear’ rarely seen since the end of 2022.
A market still seeking its bottom
The current levels have historically served as an entry zone for patient investors. However, the combination of massive liquidations, institutional outflows, and technical breakdowns argues for a market still in flux. Retail capitulation is not always a bottom signal, but it marks a key stage in forming cycle lows. The timing, however, remains uncertain.
