"The bitcoin price has experienced a dramatic plunge, delivering one of the most severe sell-offs in crypto history over the past week. Over $19 billion in positions were liquidated in a matter of hours, with more than 1.6 million traders forced out of the market, the largest liquidation event ever recorded. Many altcoins plunged over 80%, leaving investors questioning whether the Bitcoin bull market has finally topped."
"While the crash was brutal, the data doesn't suggest the end of the bull cycle. BTC is now over 1,050 days into its current cycle - similar timing to the 2017 and 2021 peaks - but the broader backdrop looks different. Bitcoin's behavior today is less about its halving schedule and more tied to Global Liquidity and the traditional business cycle. Global M2 growth has recently flattened, but rate cuts are now being priced in for late 2025. In every previous instance, falling rates have preceded Bitcoin's strongest rallies, as cheaper credit fuels renewed risk appetite."
"$19 billion in leveraged positions vanished within hours as cascading liquidations sent crypto markets lower. This flush was amplified by excessive leverage rather than broad spot selling. Funding rates have now swung deeply negative, the most bearish reading since October 2023 when BTC traded around $28,000. Historically, such conditions have marked major local bottoms and the start of sharp recoveries."
"Despite the chaos in derivatives, on-chain data tells a calmer story. Long-term holders are not selling in size, and supply metrics like coin days destroyed remain subdued. The spent output profit ratio briefly dipped negative, showing that recent buyers capitulated at a loss, a common mid-cycle shakeout pattern. Supply-adjusted coin days destroyed has continued trending lower, confirming that conviction among long-term holders remains strong."
Bitcoin experienced a dramatic plunge that liquidated over $19 billion in leveraged positions and forced more than 1.6 million traders out of the market, while many altcoins fell over 80%. BTC is now over 1,050 days into its current cycle, paralleling 2017 and 2021 peak timings, but macro conditions differ as Bitcoin behavior is increasingly tied to global liquidity and the traditional business cycle rather than solely the halving schedule. Global M2 growth has flattened while rate cuts for late 2025 are being priced in. Excessive leverage amplified the crash, but on-chain metrics show long-term holders remain largely intact.
Read at Bitcoin Magazine
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