Liquidation Data Revealed: $860 Million Leverage Liquidation Sparks BTC Pullback Storm

The cryptocurrency market started this week with a perilous outlook. Bitcoin plummeted from above $95,000 within just a few hours, ultimately breaking below the psychological level of $93,000. What is hidden behind this intense correction? According to liquidation data from on-chain analytics platforms, the answer points to a massive chain liquidation storm. As of the latest data, Bitcoin’s trading price is $89,880, up 0.48% in the past 24 hours. Despite frequent short-term fluctuations, the core risk investors need to be truly wary of lies in the market structure issues hidden behind these numbers.

The astonishing scale of leverage liquidations

According to professional data platforms, over the past 24 hours, the crypto derivatives market experienced forced liquidations exceeding $860 million, with $780 million coming from long positions being forcibly cleared. This liquidation data reflects a brutal market reality: during the previous rebound, bullish bets were significantly concentrated in specific price ranges.

When the attack from $95,000 to $97,000 reversed, a large number of leveraged longs were forced to close, triggering a chain reaction. Once the initial liquidation was triggered, subsequent closing operations resembled a domino effect, intensifying the downward momentum. This explains why Bitcoin’s decline far exceeded the initial downward pressure—partly due to active selling, but more so from mechanical forced liquidations.

At the same time, safe-haven asset gold rose against the trend by 1.7%, breaking through $4,600 per ounce, reflecting a rapid deterioration in market risk sentiment. Against the backdrop of the US imposing tariffs on European countries, escalating geopolitical risks further heightened the market’s demand for safe assets.

The exposure of derivative “phantom fire”—liquidity issues surface

A weekly report from on-chain analysis agencies revealed an unsettling fact: Bitcoin’s previous attack towards $96,000 was largely driven by “programmatic” pushes from derivative product funds, rather than organic buying support from the spot market. This passive price stacking often collapses most easily when liquidity dries up.

Specifically, the futures market’s liquidity is relatively thin. Once forced unwinding caused by short squeezes diminishes, the price trend can reverse sharply. Analysts also pointed out a key technical resistance zone: an “area of dense supply” accumulated by long-term holders near the cycle high. Historical data shows this zone has repeatedly served as a ceiling for rebounds, almost like an automatic circuit breaker built into the market.

The logic behind these liquidation figures is that when prices rely on leverage rather than fundamentals, any market tremor can trigger a cascade.

Bear market rebound or bottom building? Diverging market views

Industry analysts have differing opinions on the recent trend. Some believe that the rally since late November resembles a potential “bear market rebound” rather than the start of a new bullish cycle. The most straightforward technical indicator is that Bitcoin is still below the 365-day moving average (around $101,000), which has traditionally been a key reference point for bulls and bears.

Although short-term demand has slightly improved, the overall market structure has not undergone substantial change. Spot demand remains shrinking, and capital inflows into the US Bitcoin spot ETF are weak. These signals suggest the market has not entered a new growth cycle but may still be in the process of bottoming out.

A glimmer of hope in the capital side—signs of bottoming out

However, there are some bright spots. Compared to the end of 2025, the selling speed of long-term holders has significantly slowed, indicating that large investors are easing their distribution pressure. Meanwhile, spot capital flows on major exchanges have shifted from sellers to buyers, and selling pressure from well-known exchanges is easing. These signs point to a market stabilizing after bottoming.

Options markets also reflect this subtle shift. Although implied volatility remains low, long-term contracts still contain downside protection mechanisms, suggesting that investors’ cautious sentiment has not completely dissipated.

Insights from liquidation data to market implications

Liquidation data is not just a set of cold numbers; it vividly reflects market psychology and structural issues. The $860 million in forced liquidations tells us that when leverage becomes the main driver of price increases, the market itself harbors risks.

Industry consensus is that before sustained spot demand returns, Bitcoin will remain highly sensitive to changes in leverage and liquidity. This means investors should closely monitor liquidation trends, as the next wave of larger liquidations could happen at any time. Whether the bottom has been reached will ultimately be determined by genuine market demand.