BTC Crash Triggers $1.57 Billion Liquidation Frenzy
Sentiment status: Negative
Bitcoin has experienced its largest liquidations in three years as a fresh BTC price drop pushes the market toward a widely watched target.
New research from the X account Ltrd highlights "crazy" trader behavior, as the total cryptocurrency market capitalization plunged by up to 11% on December 9.
Coinbase Traders Triggered Aggressive Bitcoin Selling
Bitcoin met bearish expectations during Wall Street’s first trading session of the week, dropping to around $94,000.
This represented roughly 50% of a significant downside wick formed on December 5, which had created a "market inefficiency" with a 96% probability of being filled, according to analysts.
While the price drop satisfied this condition, the accompanying liquidations differed significantly from last week’s cascade.
“Today’s dump resulted in the largest liquidation event since 2021” summarized Ltrd.
Analyzing exchange activity, Ltrd revealed that Coinbase, the largest trading platform in the U.S., played a pivotal role in fueling the bearish momentum.
“We observed something wild: Coinbase traders started aggressively selling almost an hour before the mega dump” the account explained.
“While the sharp drop was ultimately triggered by a liquidation cascade, this steady selling pressure was instrumental in pushing the price into a zone where over-leveraged positions were forced to close.”
An accompanying chart compared Accumulated Volume Delta (CVD) data from Coinbase and Binance, underscoring the contrast between the two exchanges’ market dynamics.
"This Is Definitely Unusual"
Crypto liquidations have hit staggering levels, with CoinGlass reporting a jaw-dropping $1.6 billion wiped out across the market in the 24 hours leading up to December 10.
Interestingly, Bitcoin longs held up slightly better than Ethereum longs, with $142 million liquidated compared to $208 million for Ether.
“This marks the largest long liquidation event of this bull cycle so far” confirmed a prominent analyst on X, adding to the growing buzz around this unprecedented shakeout.
While some traders lamented the "liquidation carnage" hitting altcoins hardest, others saw a silver lining in the chaos.
“With this leverage flushed out, the market’s hit a reset point. Altcoins are back to key support levels. This is actually a good thing” noted the well-known trader Jelle in a candid update on X.
A Strange Cascade Sends Ripple Effects
Ltrd, however, highlighted something strikingly odd about this liquidation cascade. Several major altcoins, including XRP, suddenly found themselves under intense scrutiny.
“Something absolutely bizarre happened” the analysis stated. “In what is supposed to be a relatively mature and liquid market, we just witnessed a cascade of massive sell orders that dropped the market over 5%.”
The takeaway? "We don’t know exactly what triggered this, but it’s certainly unusual."
As altcoin traders catch their breath and market participants reassess their positions, this event serves as a stark reminder: no matter how seasoned or “mature” the market seems, crypto always has a wild card up its sleeve.
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