Bitcoin Drops 5% To 118,000 USD, Causing A Liquidation Of 577 Million USD In 1 Hour

Bitcoin fell sharply on August 14, dropping below $120,000 less than a day after reaching a new all-time high of over $124,000. According to data from coinmarketcap, the price of BTC had decreased to $118,479 at the time of reporting, marking a 2.07% decline on the 1-hour candle and 5% from the 24-hour peak. The sudden fall has spread across the entire cryptocurrency market. Ethereum fell 4% to $4,581, while XRP dropped over 3% to $3.11. Other coins in the top 10, including Dogecoin, Solana, and BNB, also saw losses of more than 3% in the same timeframe. This correction occurs after a period of sustainable growth that has pushed the overall market to a record high. Although the rate of decline may surprise some traders, market analysts have warned of potential risks. On August 13, the blockchain analysis company Glassnode emphasized that open interest on major altcoins has risen to a record high of 47 billion dollars.

According to the company, such high leverage can amplify price increases and decreases, putting traders at risk during sudden market fluctuations. Long-term Traders Lost Over 500 Million USD In 1 Hour Data from Coinglass shows that strong price fluctuations have caused liquidations of 577 million dollars in just one hour. Traders who bought, expecting prices to rise higher, have borne the majority of the losses, totaling 545 million dollars. The short positions lost 31 million dollars. Ethereum traders suffered the most, with liquidations reaching over 177 million dollars. Bitcoin traders lost around 113 million dollars, while XRP and Solana positions were liquidated for 44 million dollars and 39 million dollars, respectively.

When the liquidation window was expanded to 24 hours, the total losses reached $1.05 billion. Long positions accounted for $778 million of that, highlighting the increased risk during periods of rapid price corrections. These numbers highlight the extreme volatility inherent in the cryptocurrency market. Sudden corrections can wipe out significant unrealized profits, especially when leveraged positions dominate trading activity. For traders, this is a reminder that a strong bullish trend is often accompanied by a significant corresponding pullback, highlighting the importance of risk management strategies in a volatile market.