Bitcoin Liquidations Hit Three-year High Amid Price Fall

Bitcoin liquidations have reached three-year highs as a fresh price drop brought BTC to a widely-anticipated level.

According to new insights from X account Ltrd, the cryptocurrency market shed up to 11% of its total market cap on Dec. 9, with what was described as “crazy” trader behavior.

During the first Wall Street trading session of the week, Bitcoin's price dipped to around $94,000.

This move fulfilled predictions that a market “inefficiency” from Dec. 5 — a large downside wick — had a 96% likelihood of being filled, according to analysis.

While the price target was met, the accompanying liquidations mirrored the scale of last week’s events.

“Today’s dump resulted in the biggest liquidation since 2021,” summarized Ltrd.

Ltrd's analysis pointed to Coinbase as a significant factor in driving the price drop.

“We observed something crazy — Coinbase traders began selling aggressively almost an hour before the mega dump,” it explained.

This selling pressure pushed prices into regions where overleveraged positions were liquidated, triggering a cascade that amplified the downturn.

An accompanying chart compared cumulative volume delta (CVD) data between Coinbase and Binance, the largest global exchange, highlighting the critical role of these platforms in the sell-off.

“Certainly Unusual” Data from CoinGlass calculated total cryptocurrency liquidations at $1.6 billion over 24 hours as of Dec. 10.

Among these, BTC longs saw $142 million in liquidations, while Ethereum longs fared worse with $208 million. CoinGlass described this as “the biggest long liquidation of this bull cycle so far.”

While some lamented the significant losses, others viewed the event as a chance for the market to stabilize.

“With that leverage wiped out, the market has reset, with Altcoins flipping key levels into support. Good stuff,” trader Jelle commented on X.

Ltrd highlighted the unusual nature of the event, particularly regarding altcoins like XRP. “Something absolutely strange happened. On a large, relatively mature market, we witnessed a cascade of big sell orders that caused the market to drop by over 5%,” it noted, and continued:

“We don’t know exactly what happened, but it’s certainly unusual.”

Sources:

https://cointelegraph.com/news/bitcoin-most-liquidations-since-2021-crazy-reset-wipes-1-6-b

https://x.com/ltrd_/status/1866294055946072222

https://www.coinglass.com/LiquidationData

https://x.com/coinglass_com/status/1866270470619926966

https://x.com/VetleLunde/status/1866398646364700890

https://x.com/CryptoJelleNL/status/1866359197895675966