Investors are navigating a turbulent landscape as macroeconomic uncertainties prompt significant liquidations in the cryptocurrency market. Over the last 24 hours, liquidations soared past $900 million, with more than $550 million attributed to long positions. This tumult comes amid a broader downturn in risk-on assets, raising alarm bells about U.S. interest rates and the spending challenges faced by large tech firms as they ramp up investments in artificial intelligence initiatives.
As of late Monday, Bitcoin traded around $92,200, reflecting a 2.3% decline in the past 24 hours and marking its lowest level since late April, according to data from CoinGecko. This leading cryptocurrency has experienced a significant drop of over 14% in the last two weeks, effectively wiping out all its gains for 2025. According to Juan Leon, senior investment strategist at Bitwise, the current bearish trend across digital assets is symptomatic of a broader risk-off stance among investors, spurred by a combination of macroeconomic headwinds.
Leon emphasized that market sentiments are adjusting to a recalibrated outlook on liquidity, particularly in light of reduced expectations for an interest rate cut in December. This cautious atmosphere is further intensified by a correction in the AI sector, which is impacting all risk assets. Concerns about fluctuating prices, ongoing U.S. trade tensions, missing data from October’s jobs and inflation reports, and a faltering U.S. economy have also contributed to the prevailing sense of unease among investors.
Tech giants such as Google and Microsoft, now heavily invested in AI, are under scrutiny as their commitments to these projects may negatively affect their balance sheets in the short term. Ethereum, the second-largest cryptocurrency by market capitalization, was trading at approximately $3,000, reflecting a 2% drop since Sunday. At one point, Ethereum fell to $2,960, its lowest point in four months. Other cryptocurrencies such as Solana, Dogecoin, and XRP also faced declines of 4.4%, 3.7%, and 2%, respectively.
In equities, the Nasdaq and S&P 500 both closed down by about a percentage point, continuing their descent. This overall market downturn has also impacted crypto-focused stocks, with leading exchange Coinbase experiencing a decline of over 7%.
Data from Coinglass revealed that recent market activity has seen more than $900 million in positions liquidated in the last day, with approximately $550 million in long positions alone. Maja Vujinovic, CEO of Ethereum treasury FG Nexus, noted that some large investors have chosen to sell during price surges. This strategy resulted in cascading liquidations once key price levels were breached, intensifying the downward momentum.
Market sentiment appears increasingly pessimistic, with a recent survey indicating that 60% of respondents expect Ethereum to trend down towards $2,500 rather than rallying to $4,000. Conversely, Stephane Ouellette, co-founder of crypto services firm FRNT Financial, maintained a more optimistic perspective, suggesting that Bitcoin is hovering around its uptrend line that began in October 2024. Describing the current correction as a “normal course,” Ouellette indicated that a sharp downward move followed by a quick recovery is typical in cryptocurrency markets. He also noted that prevailing models suggest the market is approximately halfway through its cycle, with extreme levels seen in previous peaks yet to materialize.
