Crypto Market Suffers 2% Drop As Bitcoin Tumbles and $1.7B
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Santiment says more traders are betting on Bitcoin’s decline, with a growing negative narrative spreading across social media.
Crypto Reporter
Shalini Nagarajan
Crypto Reporter
Shalini Nagarajan
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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.
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The crypto market lost altitude on Tuesday, slipping 2% to about $3.9 trillion as Bitcoin fell toward $112,000 and erased the week’s gains, with roughly $1.7 billion in liquidations accelerating the sell-off as leveraged positions unwound.
Bitcoin was last down about 1.8% near $112,561, while Ethereum fell 3.3% to $41,197, BNB dropped 4% to $991.3, and Solana slid 6.2% to $219.03.
In the past 24 hours, about $1.7b of mostly long positions were wiped out, the largest long liquidation event this year, Coinglass said.
Macro Boost Meets Micro Headwinds, FTX Cash Returns And Sentiment Sours.
Flows into crypto funds remained a bright spot last week. Spot Ethereum ETFs recorded $556m in net inflows, lifting total net assets to $29.6b, according to SoSoValue. Over the same period, spot Bitcoin ETFs attracted $886.6m, taking total net assets to $152.31b.
Macro signals set the stage. The Federal Reserve cut rates by 25 basis points last week to a target range of 4.00% to 4.25%, and signaled two more possible cuts this year. That first move initially buoyed altcoins, which rallied into the weekend.
Momentum faded on Monday. Sentiment cooled shortly after the defunct crypto exchange FTX said it will begin its third distribution on Sept. 30, returning about $1.6b to holders of allowed claims as part of its Chapter 11 process.
Social gauges turned more cautious. Analysts at Santiment noted on Sunday that more traders are now “betting that the price of Bitcoin will go down, as opposed to betting that Bitcoin’s price will go up,” and said they were seeing a “much more negative narrative forming across social media.”
Liquidation Spike Signals Possible Local Low As Funding Turns Negative.
Positioning also shifted. 10X Research said that sharp liquidation spikes often mark local lows and can raise the odds of a rebound, a view supported by negative funding rates that show faster traders are net short. The note urged traders to weigh positioning, technical signals and how the market is priced into October before buying dips.
Industry executives framed the sell-off as a leverage flush rather than a fundamental break.
Maja Vujinovic, CEO and co-founder of Digital Assets at FG Nexus, said, “Roughly $1.7B in liquidations reflects excess leverage, not failing fundamentals. Overheated funding post-Fed left traders exposed; once Bitcoin rolled over, forced unwinds hit ETH and alt-books hard.”
“But history shows that these ‘leverage washes’ often mark a healthier base. With spot demand, ETF flows, and stablecoin rails intact, we’re more likely heading into consolidation than capitulation and that typically precedes the next sustained leg higher,” she added.
Liquidations Drive ‘Margin Call Avalanche,’ Traders See Healthy Reset.
Traders echoed that view on market structure. Doug Colkitt, initial contributor to Fogo, said, “This is crypto’s version of a margin call avalanche. When Bitcoin sneezes, the entire market catches leverage flu. $1.7B in liquidations isn’t fundamentals...
https://cryptonews.com/news/crypto-market-cap-slides-liquidations-hit-bitcoin-retreats/
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