Bitcoin and Ethereum sink to 3-month lows, but a bigger crypto selloff may be ahead - CryptoSlate
Bitcoin and Ethereum fell to three-month lows Thursday, with Bitcoin slumping to $71,317 and Ethereum briefly dropping below $2,000, as the cryptocurrency market lost $550 billion in value since October.
The broader crypto market's valuation has dropped from approximately $2.94 trillion in early October to $2.39 trillion, with market sentiment deteriorating significantly. CryptoQuant's Analyst Consensus Index fell from -1.0 to -1.8 standard deviations over seven days, signaling increasingly bearish expectations as investors grapple with persistent selling pressure and uncertainty over the market's next direction.
Massive liquidations hit leveraged traders
The latest price decline triggered widespread losses across cryptocurrency derivatives markets, with 125,731 traders liquidated over 24 hours, according to CoinGlass. These closed positions totaled about $727 million, with Bitcoin accounting for $293.8 million (91.1% bullish) and Ethereum $120.2 million (87.7% bullish).
Together, Bitcoin and Ethereum accounted for approximately $414 million, or 57% of the market-wide total. The selling intensified during a four-hour period when nearly $489 million in leveraged positions were liquidated, with long positions accounting for approximately $446 million of those losses compared with $44 million in short positions.
The concentration of losses among bullish traders illustrates how the price decline forced exchanges to close leveraged positions, adding to selling pressure as the market struggled to find support.
Institutional demand weakens
The downturn coincides with weakening institutional demand and contracting liquidity across the crypto market. US spot Bitcoin exchange-traded funds have recorded approximately $2 billion in net outflows over the past three weeks, while Ethereum-focused products are heading toward a seventh consecutive week of withdrawals, with more than $2.1 billion leaving the funds during that period.
The supply of major dollar-linked stablecoins contracted by $14.2 billion over 30 days, while Bitcoin's apparent demand declined by 284,000 BTC. These developments suggest the liquidation wave struck a market already struggling to attract fresh capital, leaving fewer sources of demand to absorb the selling pressure.
Technical breakdown signals deeper risks
Bitcoin has fallen below its 200-day moving average, which stood near $73,200, breaking a widely followed trend indicator. According to CoinGlass, Bitcoin's liquidation heatmap identifies approximately $68,000 as the next potential support region. However, historical on-chain valuation data suggests Bitcoin could face a considerably deeper correction.
Joao Wedson, chief executive of blockchain analytics firm Alphractal, highlighted Bitcoin's Cumulative Value Days Destroyed (CVDD) indicator, which places a historical bear-market valuation reference near $52,700. At a Bitcoin price of $72,500, the cryptocurrency was trading approximately 37.7% above this CVDD level.
In December 2018, Bitcoin bottomed near $3,122 against a CVDD reading of $3,060. Similarly, the November 2022 market bottom occurred around $15,479, slightly below the indicator's $15,900 valuation.
The market now faces two distinct price tests: whether buyers can defend the $68,000 region identified by CoinGlass, and whether a sustained recovery can push Bitcoin back above its 200-day moving average. A failure to stabilize around these levels would strengthen concerns that the latest selloff is developing into a more prolonged correction.
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