The cryptocurrency market is facing significant losses today, as Bitcoin (BTC) experienced a sharp price drop of nearly 7%, falling to $97,905. This dramatic decline has caused a ripple effect throughout the market, leading to massive liquidations. Bitcoin’s drop resulted in nearly $900 million worth of leveraged positions being wiped out across the crypto space.
Massive Liquidations Across the Market
According to Coinglass data, over 316,000 traders were liquidated during this price plunge, contributing to a total of $881 million in liquidated positions. Long positions took the hardest hit, making up around $820 million of the total, while short liquidations accounted for $60 million.
The largest single liquidation took place on the HTX exchange, with a massive $98.46 million position being liquidated.
Market Sentiment Shifts to Neutral
As the market continues to struggle, the Crypto Fear and Greed Index shows a shift in sentiment. The index now sits at 55, indicating a “Neutral” outlook. With increased caution in the market, more traders are betting against Bitcoin’s recovery by taking short positions.
Bitcoin’s Critical Support Level: $98,000
Bitcoin is currently testing its crucial support at $98,000, which it needs to hold to prevent further declines. If Bitcoin loses this level, it could trigger a deeper correction, erasing recent gains and causing more uncertainty in the market.
The pressure on Bitcoin is intensifying as the Federal Open Market Committee (FOMC) meeting approaches on January 29, adding further tension.
Interestingly, Former BitMEX CEO Arthur Hayes has predicted a “mini financial crisis,” suggesting that Bitcoin could drop to $70,000 before embarking on a strong bull run toward $250,000.
Altcoins Also Hit Hard
It wasn’t just Bitcoin that suffered altcoins faced significant losses as well. Ether (ETH) was the most affected, with over $110 million worth of long positions liquidated.
Other major cryptocurrencies, including Solana (SOL), XRP, Dogecoin (DOGE), and Chainlink (LINK), saw their values drop by double digits, adding to the overall market turmoil.
