Bitcoin Drops Below $80K, Wiping Out $700M in Longs as Crypto Markets Spiral
Bitcoin (BTC) slipped 4.5% on Monday, breaking below the critical $80,000 level and triggering a cascade of liquidations that erased $700 million from leveraged bullish positions. Ether (ETH) and Dogecoin (DOGE) were among the hardest hit, each plunging 9%, while Solana (SOL) and XRP followed with losses of 8% and 7%, respectively.
The sharp downturn wiped out $420 million in BTC longs, while ETH bulls suffered $150 million in liquidations. DOGE traders lost $30 million as open interest in Bitcoin futures fell 7% to $45 billion, signaling widespread deleveraging.
Macroeconomic Headwinds Fuel the Sell-Off
Traders pointed to macroeconomic uncertainty as a key factor behind the crypto slump. A stronger U.S. dollar and rising Treasury yields have dampened risk appetite, while expectations of Federal Reserve rate cuts in 2025 continue to diminish.
“Investors are pulling back as fears of prolonged high interest rates weigh on speculative assets,” said Nick Ruck, director at LVRG Research. “The Fed’s hawkish stance and upcoming CPI report have traders bracing for more volatility.”
Additionally, Monday’s downturn coincided with steep losses in the stock market. The S&P 500 and Nasdaq dropped 2% and 3%, respectively, marking the worst daily decline for U.S. equities since September 2022. The ‘Magnificent 7’ stocks saw their combined market cap shrink by $830 billion.
Is Capitulation Near?
Despite the bloodbath, some market watchers believe a short-term relief rally could be on the horizon. The Crypto Fear & Greed Index has fallen to 15, signaling extreme fear—often a precursor to a bounce.
Singapore-based QCP Capital noted that a dip in Treasury yields could provide some relief for crypto.
“While macro risks remain, a reversal in bond yields could offer a short-term floor for Bitcoin and risk assets,” the firm said in a research note.
As traders assess the damage, all eyes are now on the upcoming inflation report, which could determine the market’s next move.
