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- The recent Bitcoin liquidation event mirrored the last fall of markets such as FTX and Covid-19.
- The institutional interest in buying suggested a potential recovery, despite long -term volatility on the market.
The recent decline in Bitcoin (BTC) has sent shock waves through the market, which has launched the highest liquidation of long positions seen in the months.
As BTC fell, merchants who held bull positions were quickly expelled, resulting in huge losses.
This dramatic sale has withdrew creepy comparisons with previous collisions on the market, leaving many to ask if a similar fall can be on the horizon.
Market reset in motion?
Recent data show That Bitcoin long liquidations reached the level of unprecedented since September 2023.
The latest liquidation volume has exceeded $ 180 million, which is the figure that underlines extreme traders trust in bull positions before a sudden fall.
A sudden drop in price to about $ 95.3 thousand has launched a forced sale cascade, quickly removing long positions.
Source: Cryptoquant
High market expectations for upward movement were quickly demolished, which launched a drastic liquidation event.
The stinging liquidation at the end of January and the beginning of February indicates an excessive influence. This captured the merchants who used outside the guards, which led to one of the most significant market cleansing in recent history.
Bitcoin: Causes and consequences of falling price
A sudden drop in the price of BTC can be traced to several key factors. The overflowing positions were the main driver, and the traders used the high lever for for sale as BTC refused, which launched the liquidation cascade.
Macroeconomic uncertainty, including concern about monetary policy or new regulations, also flooded investors and contributed to sale.
The effects of this drop in price were significant. The liquidation event has wiped out many overcrowded merchants, reset impact on the market.
It also enhanced volatility, causing sharp prices changes. However, with cleansed excess influence, the market could now be in a better position for a more stable, organic recovery.
Comparison with similar lolls of mammoths
The recent liquidation event shows striking similarities with past collisions on the market.
Source: Cryptoquant
With $ 31.9 billion, the Oi fell sharply, like a past correction of a liquidation like a Coidd-19, a collision in August 2024 or FTX collapse 2022.
While the collision in August 2024 recorded a temporary reset, this event shows an even steep fall. Although the FTX collapse was stronger, they both share a sudden nature.
Similarly, the Coid-19 drop, guided by liquidity issues, mirrored the rapid drop in open interest and forced liquidation, resetting the market before stabilization.
Bitcoin: Resetting expectations
The Premium Gap Coinbase reveals significant interest purchase after Bitcoin’s drop range from $ 92,000 to $ 95,000.
Positive premium suggests that institutional investors enter into absorption of liquidity, exploiting price drops to accumulate BTC at lower levels.
This shows a strong institutional demand despite the broad weakness of the market.
Source: Cryptoquant
However, an indicator of the mvrv moment has remained negative From the beginning of the year, hint of that many investors are still underwater.
Read Bitcoin Price Predictions (BTC) 2025–2026
Historically, the negative Mvrv suggests prolonged consolidation or further side if the confidence does not return soon.
This liquidation event resets the mood of the market, and although over -influenced is cleared, the market remains unstable.
