Over $200 million liquidated in an hour as BTC drops below $100k

On January 7, 2025, the cryptocurrency market witnessed a significant wave of liquidations, triggered by Bitcoin’s unexpected drop below $100,000. In a short period, approximately $206 million in crypto positions were liquidated, causing widespread chaos across major digital assets.

Bitcoin’s price fell to a low of $97,207, marking a 4% decline that sent shockwaves through the market. This drop had a ripple effect on the entire crypto ecosystem, with the global market capitalization falling by 4.5%, down to $3.44 trillion. The sudden sell-off in Bitcoin also weighed heavily on altcoins, with Ethereum, XRP, and Solana all losing more than 5% in value within 24 hours.

As of the time of writing, Bitcoin was trading around $97,664, while Ethereum stood near $3,475, XRP at $2.32, and Solana was down 6%, trading at $208. This marked a significant downturn in the value of many of the leading digital assets, further exacerbated by the widespread liquidations.

In the last 24 hours, total liquidations reached $388 million, with the majority of these occurring during a single one-hour period. The majority of the liquidations affected both long and short positions across prominent cryptocurrency exchanges, showcasing the massive scale of the market’s turmoil.

Although these liquidation figures are relatively smaller compared to some of the largest liquidation events seen in the past month, the scale of the sell-off remains significant for the early days of 2025. More than 129,900 traders were liquidated within 24 hours, highlighting the vulnerability of leveraged positions in volatile market conditions. Among the largest liquidation orders was an $11.9 million ETHUSDT position on Binance, underlining the scale of the market’s shock.

The root cause of Bitcoin’s sudden dip and the subsequent market sell-off appears to be linked to recent U.S. macroeconomic data. Analysts, including crypto expert Miles Deutscher, pointed to the “hot” data coming out of the U.S. as a key catalyst for the market’s downturn. Specifically, a higher-than-expected ISM index and an increase in job openings (JOLTS) caused bond yields to spike, which in turn put pressure on risk assets, including cryptocurrencies. Deutscher summarized the situation succinctly, stating, “We’re in the ‘good data is bad data’ phase of the market for risk assets ahead of the Federal Open Market Committee (FOMC) meeting in two weeks.”

In this current market environment, the release of positive economic data can often signal concerns about inflation, leading to fears of more aggressive monetary tightening by the U.S. Federal Reserve. This has made risk assets, such as cryptocurrencies, more vulnerable to price corrections and heightened volatility.

In summary, Bitcoin’s unexpected plunge below $100,000 on January 7, 2025, set off a chain reaction of liquidations across the market, with millions of dollars wiped out in a short time frame. The combination of strong U.S. economic data, which signaled potential for continued rate hikes, and the overall risk-off sentiment in the market contributed to the broader crypto sell-off. As the market absorbs these shocks, investors and traders are likely to remain cautious, with many closely watching the upcoming macroeconomic data and the FOMC meeting to gauge the future direction of the market.