Bitcoin Price News: BTC Tumbles Below $85K as $2 Billion Liquidation Event Sparks Market-Wide Panic

Crypto Market Sees Red as Bitcoin Leads Massive Sell-Off

The cryptocurrency market is in a state of turmoil as Bitcoin’s price has plummeted, dragging the entire sector down with it. In a dramatic turn of events, the leading cryptocurrency crashed below the critical $85,000 support level for the first time since April, triggering a cascade of liquidations and fueling widespread panic among investors. The sharp decline marks the most severe monthly drawdown since the crypto winter of 2022, effectively erasing all of Bitcoin’s year-to-date gains.

BTC briefly touched a low of $81,600 before finding tentative support around the $84,000 mark. This price action unwinds the bullish momentum that followed the launch of spot Bitcoin ETFs in January, resetting the market to pre-boom levels and leaving traders to question what comes next.

A $2 Billion Liquidation Cascade Wipes Out Traders

The primary driver behind the sudden price collapse appears to be a massive deleveraging event. According to data from CoinGlass, the past 24 hours saw a staggering $2 billion in leveraged positions liquidated across the market. This forced selling puts immense downward pressure on prices, creating a vicious cycle of further liquidations.

The breakdown of the liquidations reveals the extent of the damage:

• Total Traders Liquidated: Approximately 396,000
• Total Bitcoin Liquidations: $964 million
• Total Ether Liquidations: $407 million
• Single Largest Liquidation: A $36.7 million BTC long position on the Hyperliquid exchange.

This event highlights the dangers of high-leverage trading, as hundreds of thousands of bullish traders were wiped out in a matter of hours.

Altcoins Suffer Deeper Losses

While Bitcoin’s drop has been severe, altcoins are bearing the brunt of the bearish sentiment. The pain is widespread across the board, with major tokens experiencing significant double-digit losses:

• Ether (ETH) fell below $2,750, marking a 14% drop over the past week.
• Solana (SOL) plunged over 10% in just 24 hours.
• Other major cryptocurrencies like XRP, BNB, and Cardano (ADA) all posted declines ranging from 8% to 15%.

Many major altcoins have now retraced between 20-35% from their recent November highs, with smaller-cap tokens facing even more devastating losses.

Macro Headwinds and Worsening Crypto Flows

The crypto market’s troubles are compounded by a shaky global economic backdrop. Traditional markets are also flashing warning signs, with global stocks posting their worst week in seven months. Concerns over high valuations in the AI sector and uncertainty surrounding the Federal Reserve’s potential rate cuts in December are weighing heavily on investor sentiment.

This risk-off environment is evident as capital flows towards safer assets like U.S. Treasuries. Within the crypto ecosystem, the data is equally grim. Spot Bitcoin ETFs, once a beacon of institutional demand, recorded a massive $900 million in net outflows on Thursday alone — their second-worst day on record. Furthermore, open interest in perpetual futures has fallen by 35% from its October peak, indicating a significant reduction in market liquidity and participation.

Sentiment Hits “Extreme Fear” as Analysts Brace for $75K

Market sentiment has cratered, reflecting the brutal price action. The popular Crypto Fear & Greed Index has plummeted to a score of 11, a level deep within the “Extreme Fear” territory. This is the lowest reading since the depths of the 2022 bear market.

While historically, such extreme levels of fear have sometimes preceded market bottoms, the current technical and fundamental picture offers little comfort. With Bitcoin breaking through multi-month support levels and institutional flows reversing, analysts are cautious. Some research firms are now warning that the bottom may not be in, with traders bracing for a potential price crash toward the $75,000 mark. The dominance of put options in the derivatives market over the past week further underscores the prevailing bearish outlook, as traders bet on or hedge against further price declines.