Bitcoin Falls Below $78,000 as Crypto Liquidations Hit $264 Million
Bitcoin briefly fell below $78,000 on Tuesday, reaching a low of $77,603 before recovering to about $78,600. Its market capitalisation stood at roughly $1.58 trillion at 11:20 a.m. US Eastern Time. Bitcoin positions worth about $79 million were liquidated during the move, with long positions accounting for approximately 90%. Across the crypto market, total liquidations reached $264 million, including $187 million in long positions and $77 million in short positions. The sell-off highlights elevated leverage and near-term downside risk for Bitcoin traders. Market participants are also watching US inflation data, with the Bureau of Labor Statistics scheduled to release August producer price index data on Thursday and consumer price index data on Friday.
Bearish
The immediate market signal is bearish. Bitcoin broke below $78,000, and the liquidation data shows that leveraged long positions were hit hardest. When long liquidations dominate, forced selling can amplify downward price moves and increase volatility, particularly if traders reduce leverage or place additional stop-loss orders. The $264 million market-wide liquidation total is significant enough to weaken short-term sentiment, although it does not by itself confirm a broader trend reversal. Similar liquidation events during highly leveraged crypto rallies have often produced sharp intraday declines, followed by either a technical rebound or further selling if support levels fail. Bitcoin’s recovery towards $78,600 suggests some dip buying, but traders may remain cautious until price stabilises above the breakdown area. The upcoming US PPI and CPI releases are key risk events. Softer inflation could support Bitcoin and risk assets by reducing expectations for restrictive monetary policy, while hotter-than-expected data could increase Treasury yields and selling pressure on crypto. In the short term, traders should monitor liquidation clusters, leverage levels, trading volume and the $77,600 low. Over the longer term, the impact depends more on inflation, interest-rate expectations and whether Bitcoin can reclaim lost support.