Whale Liquidations Drive Panic Selling
Bitcoin's price tumbled more than 5% to $64,270 in the early hours of Monday, before staging a partial recovery to $66,300 by late morning UTC.
The scale of these liquidations was not limited to bitcoin alone. Ether futures saw $113.89 million in forced closures, while solana (SOL) positions lost nearly $20 million overnight. These figures highlight how quickly volatility can wipe out bullish bets when liquidity thins and selling accelerates.
A single whale's misstep can send shockwaves through a fragile market.
Extreme Fear Grips Bitcoin Traders
The mood among crypto investors has soured rapidly. The Crypto Fear and Greed Index—an aggregate measure of sentiment—plunged to just 5 out of 100 on Monday, a level classified as "extreme fear" and matched only three times since 2018. This shift comes as short-term holders are realizing steep losses: Glassnode data shows that the seven-day moving average for net realized losses among recent bitcoin buyers is hovering near $500 million per day.
On paper, bitcoin’s price drop from $68,600 on Saturday to below $65,000 might seem like a routine correction for such a volatile asset. In reality, it has triggered one of the most fearful periods for traders in years.
Tariff Fears Hit Crypto Sentiment
Broader macroeconomic forces have amplified the turmoil in digital assets. Over the weekend, U.S. President Donald Trump announced plans to increase global tariffs to 15%, up from 10%, affecting both China and U.S. allies over a 150-day window. This policy shift coincided with declines in U.S. stock futures—Nasdaq 100 futures fell by 0.9%—and spurred investors to seek safety in traditional havens like gold and silver, which rose by 2% and 5.6% respectively.
The uncertainty around tariffs adds another layer of risk for bitcoin holders already contending with thin liquidity and sudden whale-driven selloffs. According to coindesk.com, increased U.S. military presence near Iran further contributed to risk-off sentiment across both crypto and equity markets during Sunday’s trading session.
See Also
$467 Million in Crypto Positions Wiped
Beyond bitcoin’s own slide, altcoins were hit even harder during the overnight rout. Solana (SOL) dropped between 7% and 8% before recovering somewhat in European hours; SUI followed a similar trajectory. In total, CoinGlass data recorded $270 million in liquidations among altcoin traders alone.
These cascading liquidations reflect how quickly leverage can unwind across the ecosystem when confidence erodes and large players move funds onto exchanges at scale. Notably, CryptoQuant’s “exchange whale ratio”—tracking large deposits relative to overall inflows—has surged to its highest point since 2015 at 0.64, underscoring how much current selling pressure is driven by major holders rather than retail investors.
Thin Liquidity Amplifies Price Drops
Liquidity conditions have deteriorated since early February, when bitcoin sent to exchanges peaked at about 60,000 BTC per day before dropping sharply to roughly 23,000 BTC per day on a smoothed basis. Meanwhile, net USDT inflows—a proxy for fresh buying power—have shrunk dramatically from $616 million in November 2023 to just $27 million recently, even turning negative in late January.
The average size of bitcoin deposits onto exchanges has also climbed back to levels last seen during mid-2022’s bear market phase. With fewer new buyers stepping in and whales increasingly active on the sell side, small shocks can trigger outsized moves—a dynamic on full display as bitcoin briefly dipped below $65,000 amid this week’s turbulence.
What to watch
If Bitcoin's price fails to hold above the $64,000 level following the recent $61.5 million HTX whale liquidation and "extreme fear" sentiment reading of 5/100, further forced liquidations could occur immediately across derivatives markets; however, whether net USDT inflows to exchanges will recover from their recent drop to $27 million remains unclear.