Bitcoin (BTC) collapsed below $64,000 Thursday, marking its most violent daily contraction since the November 2022 FTX implosion. The move erased nearly $500 billion from the global crypto market cap in hours, triggering a liquidation cascade that has left bullish traders with heavy losses.
Liquidity Evaporates Instantly
The sell-off intensified during the U.S. morning session, driving Bitcoin to a low of $64,328. Data from Coinglass reveals that over $775 million in leveraged positions were wiped out in the last 24 hours, with long positions accounting for 85% of the damage. Approximately 165,000 traders saw their accounts zeroed out as volatility breached critical support zones.
The market became myopically focused on the ETF narrative, ignoring the excessive leverage and positioning in the derivatives market.
The Macro Trigger: Treasury Signals
Institutional sentiment soured after reports surfaced that U.S. Treasury Secretary Scott Bessent hinted at a strict “no bailout” policy for the digital asset sector. The comments, perceived as a hawkish shift from the administration, forced risk desks to unwind positions aggressively. The reaction was immediate: Bitcoin spot ETFs recorded their second-worst day of outflows on record, signaling a retreat by the asset class’s newest institutional cohort.
Ether at 8-Month Lows
Ether (ETH) underperformed the broader market, plummeting to $2,068, its lowest price level since May 2025. Analysts at CoinDesk noted that ETH broke a multi-month trendline, with technical indicators suggesting further downside if the $2,000 psychological support fails to hold. The Kobeissi Letter described the move as a decisive break of “protected” price levels, shifting the medium-term outlook to bearish.
