Tuesday's crypto sell-off erased $713M in leveraged positions. What the liquidation data reveals about crowded positioning and forced exits.
Bitcoin Drops Below $90k Amid $713M Liquidation Event
Bitcoin slipped below $90,000 on Tuesday, and Ethereum fell roughly 7% in what turned into one of the sharper single-day corrections we've seen in weeks. The headline number—$713 million in liquidations—matters more than the dip itself.
Liquidations of that size don't happen in calm markets. They happen when too many traders are positioned the same way, using too much leverage, and the market finds a reason to test those positions. In this case, headlines around potential Greenland tariffs gave the tape an excuse to move, but the structure was already fragile.
What stood out to me wasn't the tariff noise—macro headlines come and go—but the behavior of the market itself. When Bitcoin broke through support near $92k, the cascade was immediate. Ethereum's 7% drop signals that altcoin exposure was even heavier. This wasn't patient long-term holders rotating into stables. It was forced selling.
Leverage works both ways. On the way up, it amplifies gains and creates momentum. On the way down, it accelerates exits and turns pullbacks into washouts. Tuesday felt like the latter. The kind of move that clears out weak hands and resets the board.
The question now isn't whether we bounce—markets always bounce eventually. It's whether confidence rebuilds quickly or if this shakes conviction for longer. Liquidation events like this tend to leave traders more cautious, at least for a few sessions. That's not bearish necessarily, just realistic. Sometimes the market needs to reset before it can move again.
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