Bitcoin drops to three-month low as massive market liquidations hit crypto

Cryptocurrencies fell sharply over the weekend, pushing Bitcoin to a three-month low of just above $63,000 as leveraged long positions were wiped out.

Market Drops and Liquidations

Bitcoin sank 5.7% in the US and dropped further in Asia to $63,311. Ether, the second-biggest token, fell to $1,731. Rich Rosenblum, co-founder of crypto market maker GSR, said the slide is a technical move because Bitcoin broke through its 200-day moving average of about $73,000. This drop caused many liquidations and new short positions to develop. Coinglass data shows that Friday's slide triggered the liquidation of roughly $1.3 billion in long crypto bets over 24 hours. Exchanges recorded about $1.9 billion of crypto liquidations in the 24 hours through 7 a.m. Sunday in Singapore, which included $684 million in Bitcoin and $466 million in Ether.

Pressures on Crypto

Digital assets have faced heavy pressure in recent weeks due to several factors. These include expectations of higher interest rates, large outflows from US spot Bitcoin exchange-traded funds, an AI-fueled risk-off mood, and ongoing fallout from a recent $6 billion Binance hack. US-listed spot Bitcoin ETFs saw almost $3 billion in net outflows from Oct. 30 through Nov. 13. Bitcoin has slumped about 25% since Oct. 21, while its low for the year remains $57,742 from July 1. Despite the sharp fall, Rosenblum noted that Bitcoin may be nearing a technical floor because it has seen support at or just below these levels over the last year.

Context

Large liquidation events happen when exchanges automatically close out traders' leveraged bets because those traders do not have enough funds to keep their positions open. This creates a fast chain reaction of selling that can push prices down much faster than normal market trades. Markets often see heavy volatility when major technical trend lines are broken.