Bitcoin’s recent price slide has triggered over $250 million in liquidations, with market sentiment indicators showing “extreme greed”—a sign that often precedes corrections. The cryptocurrency market, experiencing high volatility, faced a 5.5% drop in overall capitalization, impacting Bitcoin and other major tokens.
$250 Million in Bullish Liquidations
Bitcoin (BTC) saw a nearly 4% price drop over 24 hours, falling from $72,500 on Thursday to just over $69,000 by Friday morning. This downturn led to significant bullish liquidations as investors took profits ahead of the weekend. According to data from CoinGlass, Bitcoin futures alone accounted for $88 million in losses, while ether (ETH) futures faced $44 million in liquidations. Traders who had bet on rising prices ahead of November’s U.S. elections suffered, as nearly 90% of all futures bets were bullish.
Fear and Greed Index Hits “Extreme Greed”
The popular Fear and Greed Index, which gauges market sentiment, hit “extreme greed” levels on Thursday. Historically, such peaks have indicated local market tops, often followed by corrective movements. By Friday, the index had receded slightly to “greed,” suggesting a potential for further corrections. The index highlights a trend where extreme fear signals buying opportunities, while extreme greed often points to upcoming sell-offs.
Bitcoin’s open interest—representing the value of open contracts—reached a record high of over $43 billion earlier this week but dropped to just above $41 billion by Friday. This shift often signals a turning point, as large-scale liquidations can prompt a price reversal. The liquidations underscore a highly speculative environment, with traders potentially overleveraging amid bullish sentiment.
Wider Market Retreat as Correction Looms
Bitcoin’s downturn caused ripples across the broader crypto market, with other major tokens like Solana (SOL) and Dogecoin (DOGE) following suit, each seeing nearly $15 million in liquidations. The weekend profit-taking follows weeks of price gains fueled by positive economic and political sentiment, with some traders anticipating Bitcoin’s rise to $80,000. However, the recent wave of liquidations and sentiment indicators suggest a market at risk of correction, potentially dampening short-term gains for traders.
