Crypto Market Reels as $470M in Liquidations Fuels Broad Sell-Off
Bitcoin tumbles below $108,000 as Federal Reserve caution and significant ETF outflows spook investors, erasing recent market gains.
A sharp, broad-based sell-off swept across the cryptocurrency market on Monday, wiping out hundreds of millions of dollars in leveraged positions and sending Bitcoin to its lowest level in weeks. The total digital asset market capitalization fell by nearly 3% as investor sentiment soured amid renewed macroeconomic concerns and significant outflows from U.S. spot Bitcoin exchange-traded funds (ETFs).
Bitcoin, the market's bellwether, saw its price fall to approximately $107,000, while Ethereum dropped below the key $3,800 support level. The downturn was not isolated, with other major digital assets, including XRP and Dogecoin, experiencing declines of over 5%. The rapid price depreciation triggered a cascade of forced liquidations of leveraged trading positions, exacerbating the downward momentum.
Over the past 24 hours, the market saw more than $471 million in total liquidations, according to data from Coinglass. The vast majority of these liquidations, totaling over $412 million, were from bullish long positions, indicating the sudden downturn caught many traders off guard. The wave of liquidations affected more than 162,000 traders, with Ethereum positions accounting for the largest share at over $110 million, closely followed by Bitcoin at $96 million.
The sell-off appears to be driven by a confluence of factors, chief among them a shift in expectations for U.S. monetary policy. Recent commentary from a Federal Reserve official suggested that another interest rate cut in December is not a "foregone conclusion." This hawkish tilt has strengthened the U.S. dollar, prompting investors to pull back from riskier asset classes like cryptocurrencies.
"The primary driver is renewed caution from the Fed," noted a market analyst. "After October's rate cut, the market had priced in continued easing. Any deviation from that path strengthens the dollar and dampens appetite for assets like crypto."
Adding to the pressure were substantial outflows from U.S.-based spot Bitcoin ETFs, a key barometer of institutional interest. These investment vehicles, which were instrumental in fueling the market's rally earlier this year, saw net outflows of $1.15 billion last week, with major funds from BlackRock and Fidelity recording significant withdrawals. This trend suggests that institutional investors may be taking profits or reducing their exposure amid growing economic uncertainty.
Investors are now looking ahead to the upcoming U.S. jobs report, which is expected to provide further clarity on the health of the economy and influence the Federal Reserve's next policy move. Until then, the cryptocurrency market may remain volatile as traders navigate the uncertain macroeconomic landscape and a wave of upcoming token unlocks expected to add over $312 million in supply for several altcoins, potentially creating further headwinds for the broader market.