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Bitcoin’s derivatives market experienced an extreme turnaround today as a sudden drop in price coincided with mounting macroeconomic tensions, resulting in a staggering 11,588% liquidation imbalance that took the trading community by surprise, according to CoinGlass.
The downturn began the moment Hassett stated that even 3% growth in the first and second quarters would be disappointing. BTC was trading around $90,500 before sliding down, revealing how crowded the long side had become before the macro hit.
The imbalance number shows how one-sided the wipeout was. For every $1 liquidated from shorts, more than $115 was lost from longs. This only happens when leverage is heavily stacked in one direction and confidence wanes suddenly.
More than $20 million in BTC long liquidations occurred in minutes, while shorts barely moved. Ethereum (ETH) and other major cryptocurrencies followed with softer hits, but Bitcoin dominated every time frame on the heatmap.
Fear, uncertainty and doubts
The deeper driver was the macro backdrop. Markets are facing rising economic uncertainty at the same time that a potential new Fed head is signaling rate cuts. Rate cuts are normally bullish, in common sense, which is why traders often try to front-run them.
However, when the path to cuts is tied to uncertain data, shifting growth expectations and unclear demand strength, the bullish outlook is accompanied by anxiety rather than conviction. This makes leveraged players exit early, not because rate cuts are bad, but because the environment surrounding them is uncertain.
Morgan Stanley's prediction of a 25-basis-point cut in December only intensified the tension. With liquidity low and longs stacked, the market did not wait for confirmation. This imbalance occurred because positioning cleared out the moment uncertainty outweighed comfort, not because of a failure in Bitcoin’s price structure.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team