$10B liquidated—Crypto market in chaos!

February 03, 2025

Reading time: 5 minutes

Bitcoin finds support at $91K as trade war fears trigger $10B in liquidations

Key points:

  • Bitcoin’s price dipped to a three-week low of $91,530 before recovering above $95K, amid concerns over Trump’s new tariffs on China, Canada, and Mexico.

  • Crypto market liquidations likely surpassed $10 billion, with Bybit alone recording $2.1 billion in liquidations, highlighting extreme market volatility.

News: Global trade war fears weigh on Bitcoin’s price - Bitcoin found temporary support at $91,530 on February 3 after a sharp sell-off triggered by escalating trade tensions. The downturn followed President Donald Trump’s executive order imposing new import tariffs, leading to investor anxiety and a broader risk-off sentiment in financial markets.

According to Ryan Lee, Chief Analyst at Bitget Research, while Bitcoin is often considered a hedge against market volatility, its increasing correlation with macroeconomic events underscores how policy decisions are shaping crypto price action. Lee added that Canada, Mexico, and China have promised retaliatory measures, further heightening investor anxiety and prompting a shift away from riskier assets, including cryptocurrencies.

Bitcoin’s move aligns with predictions of a local top above $110,000 in January, before a deeper retracement. Some analysts warn of a potential drop below $70,000 based on Bitcoin’s historical liquidity cycles and macroeconomic pressures.

Massive liquidations highlight market instability - The crypto market witnessed extreme volatility, with liquidations soaring to unprecedented levels. Bybit CEO Ben Zhou estimated that total liquidations exceeded $10 billion, far surpassing initial projections of $2.24 billion from CoinGlass.

Bybit alone accounted for $2.1 billion in liquidations over 24 hours, significantly higher than the $333 million reported due to API limitations. “Moving forward, Bybit will start to PUSH all liquidation data. We believe in transparency,” Zhou announced.

Over 730,000 traders were caught in the widespread sell-off, with Binance recording the largest single liquidation order—an ETH/BTC position worth $25.6 million. However, some traders capitalized on the volatility. A savvy trader secured nearly $16 million on February 2 from a 50x leveraged short position, betting on Ether’s price decline.

What’s next for Bitcoin? - Despite the recent turbulence, some analysts remain optimistic about Bitcoin’s long-term trajectory. Alvin Kan, COO at Bitget Wallet, noted that while the sell-off reflects a typical risk-off reaction, Bitcoin’s role as a hedge against inflation and currency devaluation could support a rebound.

Looking ahead, analysts predict Bitcoin’s next move could be dictated by macroeconomic factors, including U.S. trade policies and inflation concerns. While some projections warn of further downside, long-term outlooks remain bullish, with price targets ranging from $160,000 to $180,000 for the 2025 market cycle.

Crypto stocks tumble as Bitcoin faces more losses amid global market sell-off

Key points:

  • Crypto-focused stocks slid pre-market, with Coinbase, MicroStrategy, and mining firms dropping over 5%.

  • Bitcoin's price remains under pressure as U.S. stock futures decline, mirroring global financial market volatility.

News: Market turmoil hits crypto stocks and Bitcoin - The crypto market continued its downward trajectory, with Bitcoin struggling to maintain stability as global financial markets faced mounting uncertainty. Pre-market trading saw a sharp decline in crypto-related stocks, driven by a broad sell-off across equity markets.

On Monday, President Donald Trump’s decision to impose tariffs on imports from Canada, Mexico, and China triggered fears of an escalating global trade war. This led to a risk-off sentiment in both traditional and crypto markets. Stocks in Asia and Europe slumped, while the U.S. dollar gained strength, placing additional downward pressure on major cryptocurrencies.

Bitcoin’s correlation with stock market movements remained evident as S&P 500 futures slipped 1.4%, Dow Jones futures fell 1.2%, and Nasdaq 100 futures dropped 1.7%. The broader sell-off extended to crypto-focused companies, with shares of Coinbase (COIN) and MicroStrategy (MSTR) tumbling over 5.9% in pre-market trading. Crypto mining giants MARA Holdings (MARA) and Riot Platforms (RIOT) also faced losses exceeding 6%.

Major crypto stocks and ETFs take a hit - Japan’s Metaplanet, often referred to as “Asia’s MicroStrategy” due to its Bitcoin-heavy investment strategy, saw its stock plummet by 9.44% on the Tokyo Stock Exchange. Additionally, crypto venture fund SBI Holdings fell 3.60%, reflecting the broader uncertainty in the sector.

The downturn also affected crypto-related exchange-traded funds (ETFs). The T-Rex 2x Long MSTR Daily Target ETF, which provides leveraged exposure to MicroStrategy, dropped 9.6% pre-market. Analysts pointed to the heightened market volatility as a key driver behind the downturn, as investors pulled back from high-risk assets.

Bitcoin faces more losses as tariffs shake markets - With investors pulling capital out of riskier assets, Bitcoin’s price remains highly sensitive to economic developments. The cryptocurrency has mirrored Wall Street’s volatility in recent months, reinforcing concerns that the market downturn could extend further.

The latest correction follows a weekend sell-off where major cryptocurrencies, including XRP and Ethereum (ETH), lost as much as 25%. Analysts warn that if Bitcoin fails to hold above key support levels, a deeper correction could be on the horizon.

As pre-market activity suggests further losses for equities and crypto stocks, traders are closely watching how Bitcoin responds to the heightened market turbulence. The coming days will be critical in determining whether Bitcoin can regain its footing or if the global sell-off will push prices lower.

Altcoin wipeout: Solana drops below $200 as Bitcoin’s decline sparks $365M in outflows

Key points:

  • Solana’s price fell below $200, mirroring Bitcoin’s decline under $100K, triggering a broader altcoin market sell-off.

  • SOL traders pulled $365 million from spot markets in three days, signaling a sharp drop in demand as bearish sentiment grows.

News: Solana struggles as bearish pressure mounts - Solana (SOL) has fallen below the crucial $200 mark, following Bitcoin’s slide under $100,000. The altcoin, which has a strong correlation with BTC, has seen intensified selling pressure, with traders reducing their exposure to the asset. Over the past three days, SOL’s spot market has recorded outflows totaling $365 million, according to Coinglass data.

This mass exit signals a decline in investor confidence, as more traders opt to sell or withdraw their holdings rather than buy. A sustained downtrend could spell further trouble for SOL if demand fails to recover.

Market indicators signal further decline - Several key market indicators reflect the growing bearish sentiment surrounding Solana. Its long/short ratio has dropped to 0.93, suggesting that short traders outnumber long positions, meaning more investors are betting on further price declines.

Additionally, Solana’s Chaikin Money Flow (CMF) has hit the zero line, reinforcing that strong sell-offs are outpacing buy orders. When CMF turns negative, it indicates that money is flowing out of the asset, further weakening its support levels.

What’s next for Solana? - If selling pressure persists, SOL could continue its downward trend toward $187.71, marking a new support zone. However, a revival in demand could reverse the bearish outlook, pushing Solana back toward $229.03 in the short term.

With Bitcoin’s volatility still dictating market trends, all eyes are on BTC’s next move—will it stabilize and pull Solana up with it, or will further declines drag the altcoin market even lower?

Ethereum’s biggest drop since 2021: $2.3B liquidation storm unfolds

Key points:

  • Ethereum crashed to $2,368, marking its steepest intraday decline since May 2021, as macroeconomic concerns triggered a broader crypto sell-off.

  • Over $611 million in ETH long and short positions were liquidated, leading the $2.3 billion total market wipeout.

News: ETH plummets as market turmoil unfolds - Ethereum suffered a massive sell-off on Monday, plummeting 18% to $2,368 in the early hours before partially recovering to $2,544. The decline followed U.S. President Donald Trump’s announcement of new tariffs on Canada, Mexico, and China, which rattled global markets and injected uncertainty into the crypto space.

The sudden downturn triggered a wave of liquidations across the sector, with Ethereum accounting for $611 million of the $2.3 billion total liquidations recorded over the past 24 hours, according to CoinGlass data.

Bybit CEO Ben Zhou suggested that the true scale of liquidations could be even higher—possibly between $8 billion and $10 billion—due to API limitations on liquidation reporting from exchanges.

Market volatility and Ethereum’s underperformance - Ethereum’s decline significantly outpaced Bitcoin’s 4.7% drop to $94,438, signaling heightened vulnerability in ETH’s market structure. Analysts pointed to a combination of factors weighing on sentiment, including uncertainty surrounding the Ethereum Foundation’s leadership and recent institutional-facing initiatives like Etherealize.

In the derivatives market, volatility metrics soared. Deribit’s ETH DVOL index, which measures expected price swings, surged from 67% to 101%, reflecting increased turbulence in the weeks ahead. Meanwhile, the put-call ratio spiked from 0.6 to over 2.5, suggesting that traders were aggressively hedging downside risks.

Adding to the market panic, a dormant whale transferred $228.6 million worth of ETH to Bitfinex shortly before the crash, potentially exacerbating selling pressure.

Macro factors weigh on crypto sentiment - Ethereum’s sharp decline coincided with a broader market rout triggered by Trump’s tariff policies, which imposed new 25% levies on Canada and Mexico and 10% on China. These trade measures sparked fears of inflationary pressure, complicating efforts by central banks to lower interest rates in the coming months.

Market-wide turbulence was not limited to crypto—Dow futures tumbled more than 650 points, while European stocks and the U.S. dollar rallied in response.

Jack Tan, co-founder of WOO X, commented on the market’s reaction, stating:

“Sell first, ask questions later. Such market behavior is consistent with past instances where macroeconomic policy shifts affected liquidity suddenly.”

While crypto often struggles as a short-term hedge against uncertainty, some analysts see a silver lining. According to 10x Research, traders underestimated the impact of retaliatory moves from foreign leaders in response to U.S. tariffs. Meanwhile, Jeff Park, Head of Alpha Strategies at Bitwise, suggested that Trump’s trade stance could be a step toward a Plaza Accord 2.0—a potential deal aimed at weakening the U.S. dollar to improve trade imbalances.

What’s next for Ethereum? - With ETH trading 48% below its all-time high of $4,878, analysts are eyeing key support levels. If selling pressure persists, Ethereum could retest $2,300 or lower. However, a rebound above $2,600 could restore bullish momentum, contingent on macroeconomic conditions and renewed investor confidence.

Did you know?

  • El Salvador's Bitcoin Bond was announced in 2022, with plans to raise $1 billion for Bitcoin-related projects like Bitcoin City and infrastructure. However, due to various delays, it has not been issued yet. The launch was postponed multiple times, and as of 2025, the bond has still not been launched.

  • Europe saw the introduction of Bitcoin-related investment products in 2023, primarily in the form of Bitcoin ETPs (Exchange-Traded Products). While Bitcoin futures ETFs are available in the U.S., Europe offers ETPs that may track Bitcoin’s spot price or use different mechanisms, reflecting a different regulatory landscape. These products provide European investors with exposure to Bitcoin but are not the same as the Bitcoin futures ETFs seen in the U.S.

  • In 2023, Solana’s blockchain became the first to integrate Google Cloud services, allowing Solana-based decentralized apps (dApps) to scale and benefit from faster processing and enhanced security. This marked an important step in bridging blockchain technology with traditional cloud computing infrastructure.

Top 3 coins of the day

DeXe (DEXE)

Key points:

  • At press time, DEXE was trading at $21.909, reflecting an 8.17% increase over the last 24 hours.

  • The token stood out as the biggest gainer on CoinMarketCap.

What you should know:

DEXE exhibited a robust bullish momentum, closing at $21.909. The 9-day EMA trailed the price closely, highlighting consistent upward support throughout the rally. The Awesome Oscillator displayed persistent green bars, confirming strong bullish momentum, supported by increasing buy-side volume. Trading volume saw a significant surge, further affirming the ongoing uptrend and suggesting heightened trader interest in the token. The immediate support level is established at $20.370, as indicated by the EMA. Meanwhile, resistance is located at $23.880, a critical level for further bullish continuation. A break above $23.880 might propel DEXE to test higher levels, potentially pushing toward $25. However, failure to hold above $20.370 could lead to short-term bearish retracements, with the next support zone around $19.500. Traders should watch these key levels for actionable insights.

Mantra (OM)

Key points:

  • At press time, OM was trading at $5.24, reflecting a 6.16% increase over the last 24 hours.

  • The token emerged as one of the biggest gainers on CoinMarketCap.

What you should know:

On the daily chart, OM was seen to be in a bullish trend, closing at $5.2475. The Parabolic SAR indicated a sustained uptrend, with the dots trailing below the price candles. The MACD confirmed a bullish crossover, with the MACD line surpassing the signal line and showing increasing green histogram bars, signaling growing upward momentum. Volume spiked significantly, reflecting strong buy-side interest and increased market participation. The immediate support level is evident at $4.50, as indicated by the lower price boundaries. On the other hand, resistance is projected at $5.80, a critical level for traders to monitor. A break above $5.80 could encourage additional bullish moves, possibly pushing OM toward the $6.00 mark. However, a failure to hold above $4.50 may result in a short-term pullback, with the next support around $4.00. Traders should closely monitor these levels for trading opportunities.

Filecoin (FIL)

Key points:

  • At press time, FIL was trading at $3.087, marking a steep decline of 14.35% over the past 24 hours.

  • The token was among the biggest losers on CoinMarketCap in the same timeframe.

What you should know:

FIL experienced a significant drop, closing at $3.087, as bearish sentiment dominated the market. The price broke below the lower Bollinger Band at $3.576, signaling heightened selling pressure and extreme volatility. Historically, such moves outside the Bollinger Bands often precede periods of consolidation or a potential reversal. The RSI plunged to 25.25, indicating that the asset is heavily oversold. This level of oversold conditions has, in the past, led to short-term recovery attempts, though the prevailing market sentiment remains bearish. Volume surged significantly during the sell-off, highlighting panic selling and strong bearish activity. This increased trading volume reinforces the possibility of further downward movement if bulls fail to regain control. Immediate support lies near $3.00, a psychological level that could provide a temporary pause to the downward momentum. On the flip side, any recovery attempt may face resistance near the middle Bollinger Band at $4.854, which could act as a strong barrier for upside movement. Traders are advised to watch the $3.00 support level closely. A breakdown below this level may pave the way for further losses, with the next support near $2.75. Conversely, a recovery above $4.00 could signal the start of a consolidation phase or a potential rebound.

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