Bitcoin (BTC) endured a savage intraday plunge, briefly dipping to as low as $80,000 on derivatives platforms like Hyperliquid before stabilizing around $81,000–$82,000.
This marked the asset’s steepest 2–4 hour drop since April 2025 lows, erasing all of its 2025 gains and pushing year-to-date performance into negative territory down ~11% overall.
The move wiped out over $1.9 billion in leveraged positions across the crypto ecosystem in the past 24 hours alone, with data from Coinglass showing totals reaching $1.91–$1.97 billion and affecting 391,000+ traders—primarily those betting on upside longs accounted for ~$1.78 billion of the carnage.
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This liquidation cascade amplified the volatility, creating a feedback loop of forced selling that echoed the chaos of past bear phases. The crash wasn’t isolated—it’s the culmination of mounting pressures that have battered risk assets all month.
Fed minutes revealed hesitancy on a December rate cut odds now at 37.6%, fueled by a strong U.S. jobs report. Surging Japanese 10Y yields and a robust dollar index added global liquidity squeezes.
Drove risk-off sentiment, with BTC down 25–30% from its October peak of $126,000. Crypto Fear & Greed Index hit “extreme fear” 11–15, lowest since late 2022. U.S. spot Bitcoin ETFs saw $903 million in net outflows on November 21 BlackRock’s IBIT: -$355M; Grayscale: -$199M; Fidelity: -$190M, part of $3.79 billion for the month.
Institutional retreat signaled fading appetite, with open interest in perpetual futures down 35% from October highs, thinning liquidity and worsening the slide.
A “mechanical glitch” in auto-deleveraging systems may have sparked the initial wick, liquidating $210–$250 million in minutes. Hyperliquid saw five $10M+ accounts wiped, including one $36.78M hit.
Turned a 7–8% dip into a full-blown flash crash; total crypto market cap fell below $3 trillion for the first time in five months down 8–9% in 24 hours. Ether (ETH) dropped 10–14% to ~$2,700; Solana (SOL) -10%; XRP, BNB, and Cardano -8–15%. Smaller caps like INJ and NEAR fell 16–18%.
Broader market lost $450 billion in value over the past week, with $1 trillion erased since October highs. Traders are calling it a “sentiment shock” and “bear trap,” with posts highlighting the $1B+ liquidations and ETF exodus as the “true carnage.”
One analyst noted: “This is the exact moment the market decides whether this is a healthy correction… or the beginning of a multi-month liquidation cascade.”
The most alarming signal? Bitcoin’s realized losses—profits or losses locked in when coins move on-chain—have exploded to levels unseen since the FTX implosion in November 2022, when BTC cratered below $16,000.
Glassnode data reveals: Short-term holders STHs, coins held <155 days now sit on 2.8–5.4 million BTC underwater, with 99% of their supply in loss up 24.7% since August. Daily STH realized losses hit $523 million 7-day EMA, the highest since FTX, driven by panic unwinding below the 200-day moving average.
STH profit/loss ratio flipped to -1.4, mimicking the 2022 capitulation and creating a “feedback loop” of falling prices triggering more sales. In contrast, long-term holders (LTHs) have offloaded ~452,000–815,000 BTC since July now at 14.3 million total, but their realized cap remains at all-time highs, suggesting underlying cycle confidence.
Institutions like whales are dipping in, with some buying the panic (e.g., $903M ETF outflows offset by on-chain accumulation). This feels like classic bull-market deleveraging: Sharp, painful, but often followed by rebounds once weak hands are shaken out.
Historical parallels like post-FTX lows show such extreme fear levels precede swing bottoms, with BTC’s momentum now 3.5 standard deviations below its 200-day MA—a rare setup for mean reversion.
Key levels to watch: Support: $80K Hyperliquid low or $74K next major liquidation cluster; breach could target $82K “True Market Mean.” Resistance at $86K–$88K active investors’ realized price; break above could signal stabilization.
Whales and LTHs absorb supply; Fed pivot or ETF inflows could spark a “dead cat bounce” to $100K+. Persistent outflows and macro tightening drag to $74K, prolonging the “mild bear” phase.
X chatter is split: Some see it as the “final flush” before a rally “once that wick appears, we’ll know the rally is about to kick off”, while others warn of “multi-month liquidation.” UBS calls it a “flush of excessive leverage,” hinting at upside if sentiment holds.
This is capitulation theater—painful, but often the setup for the next leg up. HODL if you’re in for the cycle; scale out leverage if you’re not.