Bitcoin Dips Below $100K as Crypto Market Faces Liquidation Wave

Bitcoin (BTC) dropped below the $100,000 mark on Tuesday, the first time it has fallen under six figures since early May. The price hit $99,954 on Coinbase and $99,990 on CoinMarketCap before rebounding above $101,000. This decline represents a 5% drop over 24 hours and a 12% loss over the past week. Since reaching its all-time high above $126,000 in early October, Bitcoin has fallen over 20%.

Ethereum (ETH) also saw significant losses, dropping below $3,300 and erasing its year-to-date gains. The token opened the year at $3,285 and is now trading around that price. Ethereum hit an all-time high of $4,946 in late August but has since fallen 31.2%. The market downturn triggered $1.3 billion in liquidations across the crypto market, with Bitcoin leading at $470 million and Ethereum following at $377 million. Other major tokens like XRP, Solana, and Dogecoin also experienced steep declines.

Brian Huang, co-founder and CEO of Glider, attributed the market conditions to the aftermath of October's mass liquidation event. He noted that with $20 billion liquidated during that period, many investors have pulled funds from risk assets. The U.S. government shutdown and the Treasury General Account expansion to $1 trillion have also intensified selling pressure, draining approximately $700 billion from markets, including crypto. These factors, combined with Federal Reserve interest rate policy concerns, are influencing trader positioning.

The downturn follows October's historic $19 billion liquidation event linked to President Trump's tariff announcements targeting China. Ethereum ETF products recorded $136 million in net outflows on Monday, while Bitcoin ETFs saw $187 million exit. The dual ETF redemption streak reflects broader market caution as traders lose conviction following recent volatility.