According to CoinDesk: Bitcoin (BTC) experienced a sharp decline of over 3% at the start of Asian trading hours, plummeting from over $65,500 to nearly $64,000 within minutes. This sudden drop occurred amid a broader stock market rout, particularly impacting U.S. technology stocks, and led to the liquidation of over $250 million in bullish bets, the largest liquidation since early July.
The decline in Bitcoin's price coincided with significant sell-offs in the stock market, driven by mixed quarterly earnings reports from major tech companies. Shares of Google parent Alphabet (GOOG) and Tesla (TSLA) dropped as much as 12% on Wednesday, contributing to a 660-point loss in the tech-heavy Nasdaq 100 index, its biggest drop since 2022. The collective market cap of the "Magnificent 7" tech stocks fell by more than $750 billion, marking a record single-day loss for the group.
These losses spread to Asian markets, where Japan's Nikkei 225 slumped more than 3% amid concerns that the Bank of Japan might hike interest rates.
The broad-based CoinDesk 20 (CD20), an index tracking the largest tokens by capitalization excluding stablecoins, fell by 3.3%. Ether (ETH) was particularly affected, with longs losing the most at $100 million following a 7.5% slump in the token amid outflows from the newly launched ETH ETF.
Binance recorded the highest liquidations among exchanges at $118 million, with 88% of these being long trades. OKX and Huobi, popular among Asia-based traders, saw as much as 94% of long traders on their platforms liquidated.
Liquidations occur when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. Such data serves as a signal of leverage being effectively washed out from popular futures products, acting as a short-term indication of a decline in price volatility.
The market sentiment for risk assets such as cryptocurrencies weakened significantly, reflecting broader concerns in the financial markets and heightened volatility.
