Bitcoin tests $100K support after massive liquidation event rocks market
Bitcoin briefly dropped to $100,000 due to a sharp market-wide sell-off, with over $1.6 billion in leveraged long positions liquidated within 24 hours. The crash was driven by a 'risk-off' sentiment and uncertainty over Federal Reserve rate cuts. Over $2 billion in crypto futures contracts were forcibly closed, with long traders accounting for nearly 80% of losses. Macroeconomic concerns, such as speculation on Federal Reserve decisions and broader market conditions, fueled the downturn. Bitcoin later rebounded slightly to $101,000 but remains down for the week, while major altcoins like Ether and Solana suffered even greater losses. Despite the plunge, some analysts remain optimistic about Bitcoin's long-term potential.
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Market-wide sell-off impacts Bitcoin
Bitcoin briefly fell to $100,000 after a sharp market-wide sell-off. Over $1.6 billion in leveraged long positions were liquidated within 24 hours. The crash was driven by a “risk-off” sentiment and uncertainty surrounding Federal Reserve rate cuts. This downturn triggered forced selling, severely impacting the cryptocurrency market.
Massive liquidation across cryptocurrency futures
The sudden wave of selling led to one of the largest deleveraging events since September. More than $2 billion in crypto futures contracts were forcibly closed in the last 24 hours. Approximately 80% of the liquidated positions—totaling $1.6 billion—were held by long traders betting on higher prices, according to CoinGlass data. This sell-off represents automatic pressure on exchanges, which are forced to sell assets when traders using borrowed funds see their positions move against them.
Macroeconomic and risk-off factors behind the sell-off
The broader “risk-off” sentiment in financial markets played a significant role in the downturn. Analysts highlighted key concerns such as uncertainty about future Federal Reserve rate cuts, fears of tariffs, tightening credit market conditions, and overvaluation in equity markets. According to Gerry O’Shea, head of global market insights at Hashdex, profit-taking by long-term Bitcoin holders also contributed, describing it as “an expected phenomenon as the asset matures.”
Bitcoin’s modest rebound and market outlook
Following the sharp plunge, Bitcoin rebounded modestly to trade around $101,000, though it remains down 5.5% over the past day and more than 10% for the week. Altcoins suffered even more, with Ether dropping 10%, Solana falling 8%, and BNB losing 7%. Despite the grim performance, some analysts remain optimistic about Bitcoin’s long-term prospects.
Bitcoin at a psychological support level
O’Shea suggested that while the $100,000 level is psychologically significant, the current market action does not undermine Bitcoin’s long-term investment case. With global risk appetite still fragile and uncertainty surrounding the Federal Reserve’s next move, the coming days will serve as a crucial test for Bitcoin, determining whether it can hold above this important level or face another wave of forced selling.