Bitcoin Crashes Below $109K Triggering $900M Crypto Liquidations

Massive Liquidations Hit Crypto Markets

Cryptocurrency markets experienced severe turbulence as over 200,000 traders were liquidated for more than $900 million in the past 24 hours. Bitcoin's dramatic fall to a seven-week low has completely erased the gains made after Federal Reserve Chair Jerome Powell's Jackson Hole speech last week.

Bitcoin Drops to Seven-Week Low

Bitcoin briefly dropped below $109,000 on Coinbase, marking its lowest price since July 9. The majority of liquidations were long positions, according to market data from CoinGlass, highlighting the severity of the market downturn.

Crypto analyst Rachael Lucas from BTC Markets explained that selling pressure intensified when a large holder offloaded 24,000 BTC, triggering a cascading wave of liquidations across the market.

Market Correction Deepens

Bitcoin has now corrected by 12% from its August 14 all-time high of just over $124,000. The cryptocurrency is down 7% since Powell's Jackson Hole speech on Friday, where he hinted at potential monetary policy easing.

CoinGecko co-founder Bobby Ong remained optimistic, stating on Monday that the market must endure these tough liquidation periods before advancing higher. However, gold advocate Peter Schiff predicted a further decline to $75,000, advising investors to sell and buy back at lower levels.

Market Dynamics and Institutional Flows

Lucas noted that capital is rotating out of risk assets, with thin weekend liquidity amplifying price swings. While Ethereum remains a focus for institutional investors, the market is questioning whether this represents a temporary pause in the uptrend or the beginning of a deeper correction.

September historically proves bearish during crypto bull market years, with significant pullbacks occurring in both 2017 and 2021 during the ninth month.

Ethereum Shows Relative Strength

Despite the market-wide decline, Ethereum is demonstrating better resilience compared to Bitcoin. ETH dropped to $4,340, which remains above last week's low, indicating stronger support levels.

Bitcoin's 2.8% daily decline contributed to the total cryptocurrency market capitalization falling below $4 trillion again. Approximately $200 billion has exited the market, reducing the total market cap to $3.84 trillion.

Altcoins Face Deeper Losses

While Ethereum shows relative strength, many alternative cryptocurrencies experienced more severe losses. Solana, Dogecoin, Cardano, Chainlink, and Sui all posted larger percentage declines than Bitcoin and Ethereum.

The widespread liquidations underscore the volatility inherent in cryptocurrency markets and the risks associated with leveraged trading positions.

Market Outlook

The current market correction raises questions about the sustainability of the recent crypto rally. Traders and investors are closely monitoring key support levels and institutional flows to determine whether this represents a healthy pullback or the start of a more significant downturn.

Market participants will be watching for signs of stabilization as the cryptocurrency market attempts to find equilibrium following this significant liquidation event.

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