Dogecoin, Ether Slide 9% as Bitcoin’s Fall Triggers Massive $700M Bull Liquidation

Crypto Markets Plunge as Bitcoin Sinks Below $80K, Triggering $700M in Liquidations

A wave of forced liquidations swept through the crypto market as Bitcoin (BTC) tumbled 4.5%, falling below $80,000 and dragging altcoins down with it. Ether (ETH) and Dogecoin (DOGE) led the decline, each plummeting 9%, while Solana (SOL) and XRP shed 8% and 7%, respectively.

The sell-off resulted in $700 million in long positions being liquidated, with BTC bulls suffering $420 million in losses, followed by $150 million in ETH liquidations and $30 million in DOGE longs getting wiped out.

Leverage Flush Signals Market Reset

The sudden plunge saw Bitcoin futures open interest drop 7% to $45 billion, a sign that highly leveraged traders were forced to exit their positions. Analysts suggest that macroeconomic uncertainty played a key role in the downturn.

“Market sentiment remains fragile as traders brace for another high inflation print and fading hopes of a Federal Reserve rate cut anytime soon,” said Nick Ruck, director at LVRG Research. “With economic data still running hot, risk assets like Bitcoin are struggling to find support.”

Broader Risk-Off Sentiment Hits Stocks and Crypto

The cryptocurrency market wasn’t the only victim of Monday’s sell-off. Wall Street saw its worst single-day drop since September 2022, with the S&P 500 falling 2% and the Nasdaq sliding 3%. The tech-heavy ‘Magnificent 7’ stocks lost a staggering $830 billion in combined market capitalization amid renewed fears of economic instability.

Meanwhile, a stronger U.S. dollar and rising Treasury yields added further pressure on speculative assets, as investors rotated into traditional safe havens like gold and the Japanese yen.

Could a Short-Term Bounce Be on the Horizon?

Despite the sharp correction, some traders see potential for a near-term rebound. The Crypto Fear & Greed Index has dropped to 15, deep in the “extreme fear” territory, a level that has historically preceded relief rallies.

Singapore-based QCP Capital noted that bond market movements could offer clues about what comes next.

“Lower Treasury yields are beginning to emerge, which could ease some of the pressure on Bitcoin and other risk assets,” QCP said in a research note. “While macro headwinds remain strong, signs of stabilization in bond markets may pave the way for a short-term bounce.”

For now, all eyes remain on upcoming economic data releases, which could determine whether Bitcoin stabilizes or extends its decline.

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