Bitcoin Crashes to $61,000 as $3 Billion in Liquidations Rattle Crypto Markets
Bitcoin plunged to its lowest level since February 2026 on Wednesday, briefly touching $61,300 before recovering to trade around $62,500, as a brutal two-day liquidation cascade wiped out approximately $3 billion in leveraged positions across the cryptocurrency market. The sell-off marks the worst deleveraging event in months and has sent the Crypto Fear & Greed Index plummeting to 12 — firmly in "extreme fear" territory.
According to data from Coinglass, over 291,000 traders were liquidated in the last 24 hours alone, with long positions accounting for roughly 85% of all forced closures. Bitcoin led the liquidation tally at $777 million, followed by Ethereum at $398 million and Solana at $89 million. The largest single liquidation was a $16.2 million BTC/USD position on Hyperliquid.
Derivatives Market Sends a Bearish Signal
The derivatives market is flashing unambiguous warning signs. Open interest in Bitcoin futures has fallen 8.5% to $111.4 billion as leveraged positions unwind, while implied volatility on both BTC and ETH options has surged over three consecutive sessions. On Deribit, the most actively traded option over the past 24 hours was the $55,000 Bitcoin put strike, and the $60,000 put now carries over $1 billion in notional open interest — a clear signal that traders are hedging against further downside.
Solana's open interest has actually surged to a record 72.16 million tokens despite its price falling 10%, indicating aggressive short accumulation. Analysts warn that altcoin pairs — which have significantly lower market depth than BTC and ETH — could suffer exaggerated price swings if Bitcoin breaks below the critical $60,000 support level.
"The message from derivatives markets is unambiguous: sentiment is bearish. Investors appear to be deserting crypto to pursue the AI narrative in traditional markets, exacerbating the geopolitical uncertainty and a fundamentally broken market structure." — CoinDesk Markets Team
What's Driving the Sell-Off
Several factors have converged to create the perfect storm for crypto markets. U.S. spot Bitcoin ETFs have experienced 13 consecutive days of capital outflows, bleeding a combined $4.4 billion across BTC, ETH, SOL, and XRP products. Geopolitical tensions, particularly the ongoing US-Iran conflict, are weighing on risk appetite across all asset classes. Meanwhile, investors are rotating capital into AI stocks and gold, both of which have outperformed crypto in recent weeks.
Data from Glassnode reveals that more than half of Bitcoin's circulating supply — roughly 10.5 million tokens — is now sitting on unrealized losses. Historically, such crossovers have coincided with major bear market bottoms, though analysts caution that it is too early to call a floor. Bitcoin did touch its 200-week moving average at $61,300, a level that has historically acted as strong support during bear cycles.
Ethereum Breaks Below Key Level
Ethereum fell approximately 7% in 24 hours, momentarily dipping below the psychologically important $1,900 mark. At the time of publication, ETH trades near $1,750 — a level not seen since late 2025. The decline has been compounded by Bitwise's enormous Ethereum bet, which is now approaching a $9 billion unrealized loss as ETH continues to slide.
Altcoins have been hit even harder. NEAR, ZEC, and JUP each lost more than 13%, while Avalanche (AVAX) dropped 11% and Cardano (ADA) fell 9%. Notably, Monero (XMR) remained relatively unperturbed, trading at $347 and posting a modest gain over the past 24 hours.
What Comes Next
Market participants are now watching the $60,000 level as the ultimate line of defense. A break below that threshold could trigger a fresh wave of liquidations, particularly among illiquid altcoin pairs. However, some analysts note that deep long capitulation events of this magnitude have historically preceded significant relief rallies. The Crypto Fear & Greed Index at 12 suggests that selling may be overdone from a contrarian perspective.
For now, the immediate outlook remains bearish, with the market digesting the worst two-day liquidation event since the October 2025 leverage wipeout.
Source: CoinDesk, Coinglass, Glassnode, BitcoinFoundation.org