The drop triggered over $70 million in liquidations of leveraged long positions on various derivatives platforms.
Bitcoin slid as the US market kicked off its first post-Christmas session, plunging by nearly $3,000 in just a few hours.
The sudden pullback swept through the derivatives market, triggering more than $70 million in leveraged long liquidations over four hours, according to data from Coinglass.
The sharp decline highlights the volatility inherent in crypto markets, where high leverage amplifies both gains and losses. When prices fall rapidly, traders holding leveraged long positions face forced liquidations as their collateral becomes insufficient to maintain open positions.
Mass liquidation events often intensify downward price momentum, as automated sell-offs create additional selling pressure in an already declining market.
The leading digital asset was trading at $87,175 at press time, down around 2% in the last four hours.
