Bitcoin drops $4,000 in 2 hours... Market swings due to leverage liquidation

Source: BlockMedia Original Title: Bitcoin Plunges $4,000 in 2 Hours… Market Turmoil Due to Leverage Liquidations Original Link: Bitcoin experienced a rollercoaster of approximately $4,000 within just 2 hours amid extreme leverage liquidation pressure. After a short-term surge, a large long position was liquidated, causing the price to recover to $90,000 briefly before dropping sharply.

That afternoon, Bitcoin briefly surged over $3,000 per hour, regaining $90,000, but then turned sharply downward, falling to around $86,000. According to the TradingView chart, the current Bitcoin price is $86,624, down 1.39% from 24 hours ago.

You can’t make this up:

Bitcoin just surged +$3,000 in 1 hour and reclaimed $90,000 as $120 million worth of levered shorts were liquidated.

Minutes later, $200 million worth of levered longs were liquidated, with Bitcoin now down to $86,000.

That’s a $140 BILLION swing in…

During this rapid surge, approximately $120 million worth of short positions were forcibly liquidated. However, immediately afterward, Bitcoin’s sharp decline led to the liquidation of about $200 million worth of long positions. In just 2 hours, the chain of liquidations of short and long positions caused the market capitalization to fluctuate by approximately $140 billion, or about 182 trillion won.

In particular, investors betting on short-term gains quickly incurred losses, with long liquidations concentrated. This reflects a sudden collapse of bullish expectations and highlights how high the market’s extreme leverage ratio is.

Excessive derivatives leverage is acting as a factor amplifying volatility. The phenomenon of ‘leverage domino’ is clearly visible, with short and long positions being liquidated alternately in response to short-term price swings, causing the price to wobble.

Meanwhile, the Alternative Greed-Fear Index, which indicates investor sentiment, remains at 74, in the ‘greed’ zone. While psychological sentiment still leans toward bullishness, there are concerns that leverage overheating could serve as a catalyst for short-term corrections from a technical perspective.