Total liquidations in the crypto market exceeded $1.1 billion on Thursday, sparing no tokens, and prompting Glassnode analysts to say bitcoin “shows signs of exhaustion.”
“Bitcoin has entered a corrective phase after the FOMC-driven rally, showing signs of ‘buy the rumor, sell the news’ dynamics. The broader market structure points toward fading momentum,” the analysts wrote.
Bitcoin dipped below $109,000 on Thursday, the first time since late August. It’s down nearly 6% in the past week and over 11% from its August 4 all-time high of $124,128 as of Friday morning. That said, bitcoin is still up roughly 67% from where it stood a year ago, around $65,000.
Lee Bratcher, president and cofounder of the Texas Blockchain Council, told Sherwood News that at its core, this is a leverage-driven sell-off.
“A huge number of traders were sitting on overextended long positions, and when BTC broke through key support, those positions started hitting their liquidation levels. Forced selling by exchanges then triggered a cascade effect, where each wave of liquidations pushed prices lower and set off the next batch of margin calls,” he said.
Bratcher said that ETF flows added fuel to the fire, as these have become a major gateway for institutional exposure.
On Thursday, bitcoin ETFs had $258.4 million in outflows, with BlackRock’s iShares Bitcoin Trust the only outlier in the group that saw inflows. Since Monday, bitcoin ETFs have seen $725 million in outflows, according to SoSoValue data.
“What we’re seeing is a classic long squeeze: overleveraged positioning, ETF outflows, and macro uncertainty converging into a sharp, self-reinforcing correction,” Bratcher said.
He added that key things to watch are ETF flows, open interest in derivatives, and whether BTC can hold above the next major support levels.
“Because if not, another wave of liquidations could be on the way,” he said.
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