The cryptocurrency market has come under renewed pressure after investors liquidated $2.56 billion worth of positions in recent days, according to data from CoinGlass. The sharp wave of Bitcoin liquidation followed a broader sell-off across global risk assets, including equities and precious metals, highlighting how tightly digital assets are now linked to macroeconomic sentiment.
Although the scale of the latest wipeout remains well below the record $19 billion in crypto liquidations seen after Donald Trump announced new tariffs on China, analysts say the move underscores the crypto market’s growing sensitivity to risk-off conditions.
Crypto Markets React to Global Sell-Off
The recent Bitcoin liquidation unfolded as investors retreated from higher-risk assets amid uncertainty in global markets. Alongside cryptocurrencies, equities, and precious metals also experienced significant declines, reinforcing the view that crypto is increasingly trading as a risk asset rather than a safe haven.
Both long and short Bitcoin positions were wiped out, showing that traders are more uncertain and prices are more volatile. Bitcoin has always had price swings, but analysts say that the speed and size of the most recent sell-off show that investors are not very confident.
Adam McCarthy, a senior research analyst at Kaiko, said, “What we’ve seen over the last few months is probably people taking a step back while they reassess their risk frameworks and how they operate in this market.”
Bitcoin Price Retreats from Record Highs
The price of Bitcoin has moved in the same way as the rest of the market. The biggest cryptocurrency in the world dropped to as low as $104,782.88 between October 10 and 11. This was just after it hit a new all-time high of over $126,000. Since then, it hasn’t been able to reach those highs again.
Bitcoin was trading close to $78,396 at the last check, down more than 6% in one session. Analysts said that part of the sharp drop was due to thin weekend liquidity, which tends to make price changes bigger. Bitfinex analysts say that lower trading volumes over the weekend made downward pressure worse, speeding up the process of selling Bitcoin.
AI Trade Concerns Add to Market Stress
In addition to crypto-specific issues, general worries about the AI sector have also had a big impact on sentiment. Microsoft’s disappointing earnings brought back worries that spending on AI might be slowing down.
Microsoft’s Azure cloud-computing revenue growth was only slightly better than expected, which caused its stock price to drop by 10% the next day. The sell-off spread to other markets, which made people even less interested in speculative assets like cryptocurrencies.
Jim Ferraioli, director of crypto research and strategy at Charles Schwab’s Schwab Center for Financial Research, said, “The biggest risk to prices at these levels has been outside forces.” He said that the AI trade could get worse and that labor market data could get weaker, which are two big threats.
Fed Chair Nomination Triggers Precious Metals Rout
Trump’s choice of Kevin Warsh as his nominee for Federal Reserve chair made investors even more nervous. The markets saw the move as a sign that the Fed was going to cut rates and tighten its balance sheet policy, which is seen as a relatively hawkish stance.
The announcement triggered a historic sell-off in precious metals. Silver suffered its worst single-day decline on record, while gold posted its steepest daily drop since 1983. The collapse in metals added to the broader risk-off environment, indirectly fueling further Bitcoin liquidation.
“Investors were looking for an excuse to lighten up, and they finally got several,” said David Morrison, senior market analyst at Trade Nation.
What the Latest Bitcoin Liquidation Means?
The most recent Bitcoin liquidation event shows a major change in how crypto markets work. Bitcoin was once thought of as a separate type of asset, but now it is closely linked to global macro trends and reacts strongly to changes in monetary policy expectations, stock market performance, and investors’ willingness to take risks.
Analysts think that traders will stay cautious as volatility continues. If macroeconomic uncertainty grows, more liquidations could happen. For now, the recent drop in prices is a reminder that crypto markets are not isolated and are very sensitive to shocks around the world.
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