The crypto market is experiencing a sharp sell-off. Bitcoin fell below $100,000, and a total of $1.7 billion worth of leveraged positions were liquidated in the last 24 hours. US-traded spot Bitcoin and Ethereum ETFs also saw a net outflow of $797 million on the same day. Investors are avoiding risk due to hawkish messages from Fed Chair Jerome Powell and the uncertainty created by the US government shutdown.
Massive liquidations in the crypto market
According to SoSoValue data, spot Bitcoin ETFs saw $577.74 million in outflows. This was the highest daily outflow since August 1st. Fidelity's FBTC fund withdrew $356.6 million, Ark & 21Shares' ARKB fund $128 million, and Grayscale's GBTC fund $48.9 million. A total of seven Bitcoin funds closed with negative flows on the day. This extended a five-day outflow trend that has exceeded $1.9 billion.
The situation was similar on the Ethereum side. Spot Ethereum ETFs saw $219.37 million in outflows, with BlackRock's ETHA fund leading the way with $111 million. Grayscale and Fidelity's Ethereum funds also saw outflows. Solana ETFs saw only a small inflow of $14.83 million, the lowest daily net inflow since launch.
These fund movements led to sharp liquidations in derivatives markets. In the last 24 hours, $1.78 billion worth of positions were liquidated in the cryptocurrency markets. Long positions accounted for 77 percent of these liquidations, while long trades accounted for 72 percent of the $1.07 billion liquidations over the 12-hour period. An additional $7.1 million was liquidated in the last hour. According to the data, investors quickly closed their leveraged positions, thus deepening the decline rapidly.
According to BTC Markets analyst Rachael Lucas, this isn't a "simple pause," but rather a strategic repositioning by institutional investors. "This fifth consecutive day of gains represents a recalibration focused on risk management," Lucas said.
Macroeconomic headwinds are also weighing on crypto. Recent statements by US Federal Reserve (Fed) Chair Jerome Powell have weakened the likelihood of a December interest rate cut. This has pushed the dollar index (DXY) back above 100. The strengthening dollar has put pressure on crypto assets, which are highly correlated with technology stocks. Lucas commented, "The unraveling of the valuation bubble in AI stocks could spill over into crypto; the high correlation with the Nasdaq is driving this."
Bitcoin fell 2.7 percent to $101,731 in the last 24 hours, while Ethereum fell 4.7 percent to $3,326. The 24-hour period also saw Bitcoin lose support at $100,000 and drop to $99,076. The Fear and Greed Index fell to 21, entering "extreme fear" territory. Experts believe such periods signal periods of increased volatility but also opportunities for long-term investors.
