The cryptocurrency market saw $1 billion worth of leveraged positions liquidated in the space of 24 hours, after a sharp sell-off pushed Bitcoin below $96,000, according to Coinglass data.
The largest losses were for long positions, which were liquidated at $878 million, compared to $160 million for short positions.
Currently, the price of Bitcoin has rolled further, falling at the time of writing to below $94,000 according to CoinGecko.
The total market cap of cryptocurrencies also fell by 9.5% to $3.3 trillion.
Major cryptocurrencies such as Ethereum fell by 8%, Ripple by 5%, while Solana and Dogecoin recorded heavier losses of more than 10%.
The decline coincided with hawkish messages from the Federal Reserve following its 25 basis point interest rate cut, which indicated smaller cuts in the future.
Federal Reserve Chairman Jerome Powell said a cautious stance was best given the uncertain economic outlook, with inflation remaining above target despite falling from its peak in 2022.
In the Bitcoin ETF market, data showed mixed performance.
Grayscale saw a net loss of $188 million, while positive inflows were concentrated in BlackRock.
Despite the recent decline, analysts see the situation as a healthy market correction, especially as Bitcoin continues to make gains of more than 130% since the beginning of the year.
MicroStrategy also continues to buy Bitcoin, recently buying a total of $3 billion this month, reflecting its confidence in the market.
The Fear and Greed Index indicates a high greed level of 75, reflecting investor optimism despite recent volatility.
