$500M in crypto longs liquidated as Bitcoin drops below $80K

The cryptocurrency market experienced a sharp downturn, with over $680 million in liquidations across derivatives platforms in the past 24 hours.

Bitcoin's (CRYPTO:BTC) price drop below $80,000 triggered a wave of forced closures, with long positions accounting for $519 million, or 76% of the total liquidations, according to CoinGlass data.

Bitcoin contributed the largest share of liquidations, amounting to $278 million, while Ethereum (CRYPTO:ETH) saw significantly fewer liquidations.

This disparity highlights heavier speculative activity around Bitcoin compared to other cryptocurrencies.

The event, known as a "long squeeze," occurs when overleveraged long positions are closed due to falling prices.

The market’s volatility also impacted short positions, with $166 million liquidated as the crash unfolded unevenly rather than in a straight decline.

Analysts attribute the event to an overheated derivatives market, where excessive leverage increases the likelihood of mass liquidations during price corrections.

Bitcoin's Open Interest—a measure of active contracts across exchanges—has been declining steadily in recent weeks.

The latest squeeze further reduced Open Interest, signaling a cooling in speculative activity.

While this trend may stabilise the market by reducing extreme volatility, it also reflects cautious sentiment among traders.

Bitcoin's price has seen significant fluctuations recently.

The downturn has raised concerns about potential further declines, with some analysts identifying key support levels around $78,200 and within the $70,000-$80,000 range.

Crypto analyst AlphaBTC commented on the situation, stating that Bitcoin appears to be "fishing for liquidity" and could face additional selling pressure before stabilising.

The broader cryptocurrency market has also been impacted by this sell-off, underscoring the interconnected nature of digital assets.

At the time of reporting, the Bitcoin (BTC) price was $80,433.82.