BTC is Crashing Again: Bitcoin Price Falls Below $87,000 Today as $200 Million Wiped Out in Minutes

Bitcoin’s Sudden Plunge: What Happened?

In a shocking turn of events, today, triggering a massive selloff that liquidated nearly <$200 million> in leveraged long positions in mere minutes. According to on-chain data trackers, this rapid cascade wiped out overleveraged traders who were betting big on Bitcoin’s continued rally past $90,000. The crypto market, which had been riding high on recent bullish momentum, is now reeling as BTC drags major altcoins down with it.

This isn’t the first time we’ve seen such volatility in Bitcoin, but the speed and scale of this drop have traders on edge. What started as a failure to break key resistance levels quickly snowballed into a full-blown liquidation event, highlighting the risks of high-leverage trading in the volatile crypto space.

The Liquidation Cascade Explained

Liquidations occur when leveraged positions are forcibly closed by exchanges to prevent further losses. Data from platforms like Coinglass reveals that longs were hit hardest, with over $190 million in Bitcoin perpetual futures liquidated across major exchanges like Binance, Bybit, and OKX. Ethereum and other altcoins followed suit, adding another $50 million to the tally.

• Bitcoin Liquidations: $195 million (95% longs)
• Ethereum Liquidations: $25 million
• Total Market Liquidations (24h): Over $300 million

The trigger? BTC’s inability to hold above $90,000, a psychological and technical barrier. Once it dipped below $88,000, stop-loss orders piled up, creating a feedback loop of selling pressure that pushed prices down to $86,500 at the lows.

Why Did Bitcoin Crash Today?

Several factors converged to fuel this :

1. Overleveraged Positions: Open interest in BTC futures hit record highs, with leverage ratios exceeding 20x on some platforms. This made the market fragile to any downside move.
2. Macro Pressures: Rising U.S. Treasury yields and hawkish comments from Federal Reserve officials have investors rotating out of risk assets like crypto into safer havens.
3. Technical Breakdown: Bitcoin failed to reclaim the $90,000-$92,000 resistance zone, invalidating short-term bullish patterns on the charts.
4. Weekend Effect: Lower liquidity over the weekend amplified the move, as fewer buyers stepped in to absorb the selling.

Whale activity also played a role, with large transfers from exchanges to cold storage signaling profit-taking by big players ahead of potential further downside.

Technical Analysis: Key Support Levels to Watch

As BTC hovers around $87,000, eyes are on critical support zones that could determine the next move:

RSI on the 4-hour chart is oversold at 28, suggesting a short-term rebound is possible. However, a daily close below $85,000 could open the floodgates for a deeper correction toward $75,000.

Altcoins Feel the Heat: Broader Market Impact

The didn’t spare altcoins. Ethereum dropped 5% to $3,200, Solana shed 7%, and meme coins like Dogecoin plunged over 10%. The total crypto market cap contracted by $150 billion in hours, underscoring BTC’s dominance in dictating market direction.

DeFi tokens and layer-2 projects saw amplified losses due to their higher beta. Traders are now questioning if this is the start of an altcoin season delay or just a healthy shakeout.

Market Sentiment and On-Chain Metrics

Fear & Greed Index has flipped to ‘Fear’ (score: 35), a level that historically precedes buying opportunities. On-chain data shows:

• Exchange inflows spiking: 15,000 BTC in 24 hours
• HODL waves indicating long-term holders unmoved
• Funding rates turning negative: Bearish signal for perps

Social volume around ‘Bitcoin crash’ is surging, but sentiment analysis tools like LunarCrush show neutral-to-bearish vibes. Institutional flows via ETFs remain positive, with BlackRock’s IBIT seeing inflows despite the dip.

What Should Traders Do Next?

For Short-Term Traders:

• Avoid revenge trading; wait for confirmation above $89,000.
• Scale in shorts if $85,000 breaks.
• Use lower leverage (under 5x) to survive volatility.

For Long-Term Investors:

• This dip could be a buying opportunity if BTC holds $80,000.
• DCA (Dollar-Cost Averaging) into BTC and ETH remains a solid strategy.
• Monitor upcoming events like FOMC minutes and CPI data.

Risk management is key—never risk more than 1-2% per trade in this environment.

Looking Ahead: Is This the Bottom?

While today’s crash feels brutal, Bitcoin has survived worse. Historical patterns post-liquidation events show average 15-20% rebounds within a week. With Bitcoin halving effects still lingering and ETF adoption growing, the long-term bull thesis remains intact.

However, persistent macro headwinds could test lower supports. Stay vigilant, diversify, and don’t let FOMO or FUD dictate your moves.

Bitcoin’s journey is far from over. Will it bounce back to new highs, or is this the prelude to a deeper bear phase? Share your thoughts in the comments below!

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