Bitcoin plunges nearly $3,000 as $70M+ of longs liquidated in four hours
Bitcoin dropped almost $3,000 during the first US trading session after Christmas, sparking forced liquidations across derivatives markets. Data from Coinglass shows more than $70 million in leveraged long positions were liquidated over a four-hour period. The rapid decline amplified selling pressure as margin calls and automated liquidations added downward momentum. At press time BTC traded around $87,175, down roughly 2% over the prior four hours. The move underscores the heightened volatility in crypto markets and the risks of high leverage for traders.
Bearish
A sudden multi-thousand-dollar drop that triggers large liquidations is typically bearish in the near term. Over $70M of long liquidations in four hours increases selling pressure via forced exits and automated market orders, which can deepen declines and raise short-term volatility. Historical parallels include similar liquidation cascades in 2018, March 2020 and May 2021, where large leveraged sell-offs intensified price drops. For traders this increases short-term downside risk and favors risk-management actions: reduce leverage, widen stops, or consider short/hedge positions. Medium- to long-term impact is more neutral and depends on broader fundamentals (on-chain flows, ETF flows, macro sentiment). If liquidations subside and on-chain/ETF demand remains strong, price can recover; but persistent outflows or renewed leverage unwind would prolong bearish pressure.