Cryptocurrency Market Plunges: 720,000 Liquidations in 24 Hours

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The global cryptocurrency market experienced a dramatic downturn on February 3, triggering widespread liquidations and investor concern. As Asian markets opened lower, digital assets followed suit with sharp declines across the board. Bitcoin dropped over 6%, briefly touching a low of $91,130.30, while Ethereum plunged as much as 25%, hitting its lowest level in nearly a year.

This market correction marks one of the most intense volatility episodes in early 2025, with over 720,000 traders liquidated and more than $2.21 billion in leveraged positions wiped out within 24 hours. The event has reignited discussions about market resilience, risk management, and the broader macroeconomic forces influencing crypto valuations.

Bitcoin Dips Below $92,000 Amid Sustained Selling Pressure

Bitcoin, the flagship cryptocurrency, continued its downward trajectory starting from January 31, when prices peaked near $106,000 per coin. Over four consecutive trading sessions, BTC lost momentum, ultimately dipping below $92,000 during intraday trading on February 3.

According to CoinGlass data, Bitcoin’s 24-hour decline reached 6.83%, with a temporary low at $91,130.30**. At the time of reporting, BTC was trading at approximately **$92,899.30, reflecting persistent bearish sentiment.

While corrections are not uncommon in highly volatile markets, this drop stands out due to its breadth and speed. The sudden price swings triggered multiple stop-loss orders and futures liquidations across major exchanges.

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Altcoins Hit Hard: Ethereum Leads the Downward Spiral

The downturn wasn’t limited to Bitcoin. A wave of panic selling swept through the altcoin sector, with major digital assets experiencing double-digit percentage losses.

Ethereum’s decline is particularly significant given its role as the backbone of decentralized finance (DeFi) and smart contract platforms. The steep fall reflects broader risk-off behavior among investors amid growing uncertainty.

Massive Liquidation Event: $2.21 Billion Wiped Out

The scale of leverage in the crypto market became painfully evident as prices tumbled. Per CoinGlass analytics:

With long positions dominating the wiped-out value, many speculate that over-leveraged bulls were caught off guard by the sudden reversal. The imbalance suggests that sentiment had become overly optimistic before the correction hit.

Such large-scale liquidations can create cascading effects—falling prices trigger margin calls, which force further sell-offs, amplifying downward pressure in a feedback loop.

What Triggered the Crash?

Market analysts point to a combination of macroeconomic developments and sector-specific shocks:

Geopolitical Tensions and Risk-Off Sentiment

Reports indicate that renewed trade tensions—specifically threats of new import tariffs by former U.S. President Donald Trump targeting Canada, Mexico, and China—sparked a global risk-off move. Cryptocurrencies, often treated as high-beta risk assets, reacted sharply to this news despite their decentralized nature.

AI Hype Shifts Market Focus

In late January, DeepSeek—a cutting-edge AI model developed by Hangzhou-based DeepSeek—topped both the U.S. and Chinese Apple App Store download charts, surpassing even ChatGPT. This unexpected rise drew significant attention from policymakers and investors alike.

There were immediate implications for tech stocks. Nvidia, a key player in AI chip manufacturing, saw its market value drop nearly $1 trillion amid concerns about shifting investment priorities and potential regulatory scrutiny.

As capital rotated out of speculative tech and crypto sectors into perceived safer or more innovative plays, Bitcoin and other digital assets suffered.

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These terms reflect common queries users enter when seeking explanations for sudden price movements and guidance on navigating turbulent markets.

Frequently Asked Questions (FAQ)

Why did Bitcoin drop so suddenly?

Bitcoin’s sharp decline was driven by a confluence of factors: escalating geopolitical trade tensions, profit-taking after an extended rally past $100K, and a broader shift in investor focus toward artificial intelligence innovations like DeepSeek. As risk appetite diminished, capital flowed out of volatile assets including crypto.

How many people got liquidated in this crash?

Over the past 24 hours, approximately 720,000 traders faced liquidation across major exchanges. This massive number highlights the prevalence of leveraged trading in today’s crypto ecosystem and underscores the importance of risk management.

Is Ethereum’s 25% drop unusual?

While Ethereum is known for volatility, a single-day drop of 25% is rare and typically occurs during extreme market stress—such as regulatory crackdowns, protocol failures, or macro shocks. In this case, it reflects broad-based deleveraging rather than project-specific issues.

Could this be a buying opportunity?

Some analysts view sharp corrections as accumulation opportunities for long-term holders. However, entering during high volatility requires careful timing and risk assessment. Historically, markets rebound after severe drawdowns—but not without further downside risks.

What caused the $25 million ETH liquidation?

The largest single liquidation occurred on Binance involving an Ethereum futures contract worth $25.6 million. Such positions are vulnerable during rapid price swings, especially if insufficient margin is maintained or hedging strategies are absent.

Will crypto recover in 2025?

Despite short-term turbulence, fundamental adoption trends—such as institutional interest, spot ETF approvals, and blockchain innovation—remain intact. Many experts believe that while volatility will persist, the long-term outlook for digital assets remains positive.

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Final Thoughts: Navigating Volatility with Discipline

The February 3 selloff serves as a stark reminder that cryptocurrency markets remain highly sensitive to external shocks and speculative behavior. While innovation continues at pace—from AI integrations to Layer-2 scaling solutions—investor psychology and leverage use can quickly override fundamentals.

For traders and holders alike, maintaining discipline through diversification, using stop-loss mechanisms wisely, and avoiding overexposure to volatile tokens is crucial.

As the market digests these developments, all eyes will be on whether support levels hold or if further downside lies ahead. One thing is certain: in crypto, preparation beats reaction every time.