BTC loses $20,000 in 9 days... 24-hour liquidation volume surpasses 1.9 trillion won
Cryptocurrency markets, including Bitcoin (BTC) and Ethereum (ETH), experienced significant declines on the 5th (local time). Bitcoin plummeted by more than $20,000 (approximately 29.35 million won) in nine days, falling to around $66,900 (approximately 98.17 million won), while ETH gave up its $2,000 (approximately 29.35 million won) support level, reflecting overall market selling pressure.
The recent decline began when Bitcoin encountered resistance near the $90,000 level it had hit last Wednesday. It then fell to $81,000 on Thursday of last week, then dipped below $75,000 over the weekend, and finally, on Monday night, widened its decline again, falling to the mid-$60,000 range.
The derivatives market was also severely shaken by this plunge. According to CoinGlass, the total amount of positions liquidated over a 24-hour period exceeded $1.3 billion (approximately KRW 1.9077 trillion). In just one hour, liquidations reached $350 million (approximately KRW 513.6 billion), and the number of investors whose positions were forcibly closed in a single day is approaching 300,000. The largest liquidation occurred on the Aster exchange, involving $11 million (approximately KRW 16.1 billion).
ETH also falls below $2,000, with altcoins, including BNB and XRP, showing weakness across the board.
Most altcoins weren't immune to the recent downtrend. Ethereum fell 9% in a single day, losing support below $2,000, its lowest level since April of last year. Binance Coin (BNB) fell 10% to $660 (approximately 96.82 million won), and Ripple (XRP) fell a staggering 15% to $1.32 (approximately 1,937 won).
In addition, major small and medium-sized altcoins also showed double-digit declines, including Zcash (ZEC) -19%, Morpho (MORPHO) -14%, Nexo (NEXO) -14%, Monero (XMR) -12%, LEO (LEO) -12%, and Sui (SUI) -11%. This overall market decline, coupled with excessive leverage, is interpreted to have led to large-scale liquidations.
Stocks hit record lows immediately following Trump's election, but policy risks also surface.
This is the first time Bitcoin has traded at such lows since last November. That was shortly after the US presidential election, when President Trump, who had been noted for his pro-cryptocurrency stance, was elected. However, concerns about his policy stance have recently been raised, adding to market turmoil.
The Bitcoin price plunge is attributed to a complex mix of factors, including concerns about quantitative tightening (QT), bond market instability, and macroeconomic indicators. However, some market analysts believe this correction is part of a resolution to short-term overbought conditions.
High volatility is expected to persist for the time being until the cryptocurrency market finds a technical recovery point. Investors should be more cautious about using leverage at this point.
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🔎 Market Interpretation
Over the past nine days, Bitcoin has fallen by approximately $20,000, reaching near the key support level of $66,900, and market volatility has been extreme, with $1.3 billion worth of liquidations occurring in a single day.
Beyond BTC, altcoins, including Ethereum, BNB, and XRP, also saw significant declines of over 10%, with leverage liquidations and policy uncertainty cited as contributing factors to the market decline.
💡 Strategy Points
The current market is in a period of adjustment due to excessive leverage, and there is a high possibility of increased volatility rather than a short-term recovery.
Investors need to adjust asset allocation and adopt conservative trading strategies for loss-cutting and risk management.
- Trend monitoring of the policy environment and sensitivity management to U.S. interest rate and bond market indicators are important.
📘 Glossary
Leverage: An investment method that utilizes external funds to invest in assets larger than one's own capital.
Liquidation: This refers to the forced closure of a position by the exchange when the holding margin falls below the maintenance margin.
Support line: A technical psychological line that supports the price even when the asset price falls due to a certain level of buying pressure.
QT (quantitative tightening): A monetary policy in which the central bank reduces liquidity in the market by suspending asset purchases and reducing its asset holdings.
💡 Frequently Asked Questions (FAQ)
Q.
How do you determine whether Bitcoin's plunge to $20,000 is a short-term correction or the beginning of a long-term decline?
While the prevailing interpretation is that this is a short-term correction following an excessive rise, the Bitcoin market is highly sensitive to macroeconomic variables. Depending on the persistence of external factors such as bond yields, quantitative tightening (QT), and US political risks, a long-term decline cannot be ruled out. In technical analysis, a breakdown of the support line serves as a key indicator.
Q.
Why did altcoins plummet simultaneously?
Bitcoin serves as the leading player in the cryptocurrency market. A significant decline in BTC dampens investor sentiment, leading to even greater declines for smaller altcoins. Furthermore, some altcoins are linked to Bitcoin's DeFi (decentralized finance) ecosystem, creating a cascading effect.
Q.
You say 'policy risk' is one of the reasons for the market decline. What policy are you referring to?
Former President Trump, a leading US presidential candidate, has a favorable image toward cryptocurrencies. However, recent concerns have raised that his specific policy direction may be ambiguous or involve regulation. Furthermore, the interest rate policies and regulatory stance of the Securities and Exchange Commission (SEC) and the Federal Reserve (Fed) are considered key policy risks that directly impact investor sentiment.
TP AI Precautions
This article was summarized using a TokenPost.ai-based language model. Key points in the text may be omitted or inaccurate.
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