Bitcoin Flash Crash: $87K Breached, Liquidations Surge

Bitcoin experienced a rapid sell-off, briefly falling below $87,000 and erasing a week's worth of gains in a single trading session. This triggered a cascade of liquidations and impacted the broader cryptocurrency market.

Key Events:

• Price Plunge: Bitcoin dipped below $87,000.
• Liquidation Event: Approximately $400 million in liquidations occurred within one hour.
• Market Impact: Global crypto market capitalization decreased by 4% to $3.04 trillion.
• Trading Volume Surge: Trading volume spiked to over $110 billion as investors reacted to the price volatility.

Analysis and Perspectives:

Some analysts attribute the crash to thin weekend liquidity combined with high leverage, suggesting a structural weakness in the crypto market. They highlight the speed of the decline, with Bitcoin dropping $4,000 in minutes without any specific news catalyst, triggering mass liquidations.

Other analysts draw parallels to previous bearish cycles, cautioning that further sideways movement or another correction may be possible. The $80,000 support level is identified as a crucial threshold; a break below this level could trigger a more significant downturn, potentially leading to a "wipe out" scenario with a target as low as $48,000.

An alternative explanation suggests a broader asset rotation, with investors shifting capital from digital assets like Bitcoin to traditional safe-haven assets like precious metals, particularly silver. This theory is based on the idea that investors are reducing their risk exposure.

Bitcoin's market dominance remains substantial at 57.1%, indicating continued interest, but the recent volatility underscores the risks associated with leveraged trading in the cryptocurrency market.

Bitcoin has recovered slightly and is currently trading in the $87,200–$87,400 range.