Bitcoin’s recent performance has sparked concerns across the cryptocurrency landscape as it dipped below the $110,000 mark early Thursday morning. This decline was not isolated; it catalyzed a broader sell-off that saw most major altcoins also take significant hits. Following the initial drop, Bitcoin hovered around $110,418, down 1.3% on the day, while the total market capitalization of the cryptocurrency sector fell by 3.1% to $3.85 trillion.
The data revealed a concerning trend, with approximately $524 million in liquidations triggered throughout the market. This phenomenon indicated a wave of forced sell-offs as traders faced losses in the wake of the downturn. In the aftermath of Bitcoin’s plunge, the majority of the top ten cryptocurrencies—excluding stablecoins—showed a decline, with values ranging from 0.9% to a drastic 5.3% drop. Ethereum’s price slipped 1.8% to around $4,000, XRP fell by 4% to approximately $2.40, and other notable cryptocurrencies like Solana, Cardano, and Dogecoin recorded losses of 4.9%, 3.5%, and 3.9%, respectively. The only outlier that managed to maintain a positive trajectory was Tron, which rose by 1.2%.
Wenny Cai, the co-founder and COO of crypto derivatives platform SynFutures, highlighted the prevailing market sentiment, stating that altcoins are experiencing pressure due to a liquidity shift back toward Bitcoin and stablecoins amidst a risk-off atmosphere. The drop in market capitalization and the resultant liquidations reflect a trend of market de-risking that escalated in tandem with rising tensions between the U.S. and China, which have further unsettled investors.
Max Shannon, a senior associate at Bitwise Europe, pointed to an overhang from a massive $19 billion liquidation event that occurred the previous weekend. He advised caution, especially as the U.S.-China trade situation remains uncertain. Shannon anticipated a range-bound price action until a resolution emerges in the geopolitical landscape.
The recent market movements also underscored a substantial rise in bearish sentiment, characterized by increased positioning in options. Analytics from the options platform GreeksLive revealed that over $1.15 billion—equating to about 28% of total options volume—has funneled into shallow out-of-the-money puts that are set to expire this week and the following month. This concentrated activity in the $104,000 to $108,000 range signals that traders are hedging against further declines, which is further emphasized by the negative options skew indicating a prevalent fear among large liquidity providers.
Furthermore, participants on the prediction market Myriad project a limited chance—between 10% to 15%—for Bitcoin, Ethereum, and Solana to surpass key price thresholds by Friday. These estimates reflect a bearish outlook, exacerbated by the overall fragile market sentiment.
Amidst these developments, Shannon noted that altcoin price movements could remain diverse, with some assets continuing to decline while others, perceived as higher quality, may recover. Cai echoed this sentiment, forecasting more volatile price action as market leverage resets and capital consolidates around the most established cryptocurrencies. As anxiety grips the market and options traders brace for potential declines, the trajectory for recovery largely hinges on de-escalation in trade tensions and a revival of institutional demand.
