Bitcoin dropped almost 6% in a single session, briefly slipping to the $81,000 mark, while Ethereum posted losses exceeding 6%. The move triggered a wave of forced liquidations across derivatives markets.
In just 24 hours, more than $1.68 billion in crypto positions were wiped out, marking one of the most severe leverage resets since the post-ETF rally in 2024.
Traders, Investors Lose Money as Bitcoin Crashes to $81,000, $1.68 Billion Wiped Out in 24 Hours
Nearly 93% of those liquidations came from long positions, underscoring how heavily skewed market positioning had become.
This was not a gradual sell-off fueled by retail fear. It was a structural failure. Elevated leverage collided with declining prices, margin calls cascaded, and order book liquidity evaporated. Bitcoin alone accounted for roughly $780 million in liquidations, while Ethereum saw over $400 million erased as leveraged bets unravelled.
The concentration of leverage was the key catalyst. Data from CoinGlass and Glassnode showed funding rates had stayed persistently positive for weeks, reflecting aggressive long positioning.
Many traders were using high leverage, betting that ETF inflows and institutional demand would continue without interruption. When price momentum stalled, that crowded trade collapsed rapidly.
Macro Pressure and a Market-Wide Risk-Off Shift
Broader market conditions amplified the damage. U.S. equities sold off sharply, and risk assets declined in tandem.
Renewed geopolitical tension and tariff threats from the Trump administration pushed investors into a defensive stance. Rather than stepping in to buy the dip, institutional players reduced exposure, accelerating the downside move.
The result was a sharp reset across crypto markets. Bitcoin’s market capitalisation fell to approximately $1.64 trillion, while sentiment plunged into extreme fear. The Crypto Fear & Greed Index dropped to 16, a level typically associated with periods of intense stress rather than speculative peaks.
This decline was not a rejection of Bitcoin’s long-term fundamentals. Instead, it reflected a breakdown in leverage, liquidity, and confidence occurring simultaneously—a reminder that even strong narratives can unravel quickly when positioning becomes too crowded.
Speaking with crypto analyst Olumide Adesina explained that Bitcoin’s sharp decline was not caused by any flaw in the network or a security breach, but by excessive leverage in the market.
He said:
“Bitcoin fell due to excessive leverage, not a technical issue. Over $1.68 billion in crypto positions were liquidated in 24 hours, with 93% from long bets.”
Adesina noted that funding rates had remained positive for an extended period, signalling crowded bullish trades, and once prices slipped, a wave of margin calls intensified the sell-off across major exchanges.
SEC to generate revenue from crypto transactions
Meanwhile, reported earlier that the Securities and Exchange Commission (SEC) is working on updating its rules for cryptocurrencies.
The SEC acknowledged that bitcoin transactions will generate significant tax revenue, although it did not specify the exact amount.
Also, the commission plans to expand cryptocurrency licensing, allowing citizens to trade on official, regulated exchanges where transactions will be taxed and monitored.
