Bitcoin (BTC) nosedived over 3% early Thursday as Asian markets suffered a broader stock market downturn and weakening sentiment for risk assets like cryptocurrencies. BTC fell from over $65,500 to nearly $64,000 within minutes during Tokyo trading.
Massive Liquidations
This sudden plunge resulted in over $250 million in bullish bets being liquidated, marking the worst hit since early July. Liquidations happen when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. This data indicates leverage being flushed out from popular futures products, signaling a potential short-term decline in price volatility.
Ether Also Hit Hard
Ether (ETH) longs lost the most, with $100 million liquidated following a 7.5% slump in the token amid outflows from the newly launched ETH ETF.
Major Exchanges Affected
Binance recorded the highest liquidations among exchanges at $118 million, with 88% being long trades. OKX and Huobi, popular among Asia-based traders, saw as much as 94% of long trades on their platforms liquidated.
Impact of U.S. Tech Stocks
The dive in cryptocurrency prices coincided with a significant drop in U.S. technology stocks on Wednesday. The tech-heavy Nasdaq 100 index lost 660 points, its biggest drop since 2022. Mixed quarterly earnings from Alphabet (GOOG) and Tesla (TSLA) led to their shares falling as much as 12%. The “Magnificent 7” tech stocks collectively lost over $750 billion in market cap, the most on record for the group.
Asian Market Response
Losses spread to Asian markets early Thursday, with Japan’s Nikkei 225 slumping more than 3% amid concerns that the Bank of Japan could hike interest rates.
