Bitcoin Drops to $83,000 as $1 Billion in Leveraged Bets Gets Wiped Out
Bitcoin fell nearly 3 percent on Wednesday to around $83,000, dragging the wider crypto market down with it. Ethereum dropped more than 5 percent to about $2,575, while XRP slipped 5.5 percent to $1.42.
The sell-off wiped out more than $1 billion in leveraged trading positions in 24 hours, according to market data. About 1.25 million traders saw their positions liquidated. Bitcoin alone accounted for roughly $209 million of the liquidations, followed by Ethereum at $87 million.
What caused the drop?
Three forces hit the market at once. First, geopolitics. Tensions in the Middle East escalated after attacks on tankers in the Strait of Hormuz. Brent crude oil climbed above $100 a barrel. When oil spikes and uncertainty rises, investors typically move away from risky assets — and crypto is treated as a risky asset. Second, US interest rates. The 10-year Treasury yield rose to about 5.3 percent, its highest level in years. Minutes from the Federal Reserve suggested another rate increase is still possible this year. Higher yields make safe government bonds more attractive compared to crypto. Third, leverage. Many traders had borrowed heavily to bet on rising prices. When Bitcoin slipped below key support near $84,000, automatic sell orders triggered a cascade — forced selling pushed prices lower, which triggered more forced selling.
The bigger picture:
Despite the drop, Bitcoin is still up about 30 percent over the past three months. The total crypto market stands near $2.84 trillion. Some analysts see a possible rebound. Large holders have been quietly buying — about 14,335 Bitcoin accumulated since October 1, and around 40,000 Bitcoin moved off exchanges in two weeks, which usually signals long-term holding rather than selling. The key levels to watch: if Bitcoin holds above $83,000, buyers may step back in. A break below could open the door to $80,000. A recovery above $86,500 would suggest the worst of the sell-off is over. Crypto-related stocks fell too. Coinbase dropped 4 percent, and Strategy — the company holding the most Bitcoin — fell more than 6 percent.