Bitcoin’s Dip Below $110,000 Sparks $524 Million in Crypto Liquidations
The crypto market saw a flash correction on Monday as Bitcoin (BTC) briefly fell below $110,000, triggering widespread liquidations across major exchanges. According to data from Coinglass, over $524 million in leveraged crypto positions were wiped out in just 24 hours — the largest single-day flush in nearly a month.
The move follows an intense rally that pushed Bitcoin above $120,000 last week, fueled by record ETF inflows and renewed institutional demand. But analysts say the pullback may have been inevitable as traders took profits and overextended leverage finally unwound.
Overleveraged Longs Get Wiped Out
Out of the $524 million in liquidations, more than $420 million came from long positions — indicating that bullish traders were caught off guard by the sharp move lower.
Bitcoin’s price dropped as low as $109,720 before rebounding back above $111,200 at press time. Ethereum (ETH) also slipped by over 3%, trading near $4,160, while Solana (SOL), XRP, and Dogecoin saw similar declines.
“We’re seeing a classic post-ETF hangover,” said James Edwards, a crypto market analyst at Finbold. “Bitcoin overheated above $120,000, and when funding rates spiked, a correction was bound to follow. This reset clears the way for more sustainable growth.”
Funding Rates and Open Interest Reset
Before the crash, perpetual futures funding rates had climbed to their highest levels since March, signaling excessive bullish leverage. The correction brought those rates sharply down, suggesting the market may now be returning to a healthier state.
Open interest — the total number of outstanding futures contracts — fell by nearly $1.2 billion overnight, showing that many speculative traders were forced out of positions.
“From a structural perspective, this is constructive,” said Ki Young Ju, CEO of CryptoQuant. “It removes froth from the market and gives Bitcoin room to rebuild momentum without excessive leverage pressure.”
Macro Factors Add to the Pressure
The timing of the drop coincided with renewed volatility in traditional markets. U.S. Treasury yields rose to their highest level in six weeks as investors digested hawkish comments from Federal Reserve officials ahead of this month’s Federal Open Market Committee (FOMC) minutes.
Meanwhile, gold surged to a new all-time high, briefly surpassing $2,500 per ounce, as geopolitical tensions continued to fuel safe-haven demand — indirectly pressuring risk assets like Bitcoin and equities.
“When gold rallies aggressively, it often signals a rotation out of risk-on trades,” said Lisa Kaas, macro strategist at Bitwise. “We’re seeing some spillover from that into the crypto space.”
Altcoins and DeFi Take a Hit
While Bitcoin led the downturn, altcoins suffered disproportionately. Solana (SOL) fell 5.4% to $188, Avalanche (AVAX) dipped 6.3%, and Dogecoin (DOGE) slid 4.1%.
DeFi tokens weren’t spared either — Uniswap (UNI) and Aave (AAVE) each declined around 7%, as total value locked (TVL) across decentralized protocols slipped back below $108 billion, according to DefiLlama.
Despite the pullback, on-chain activity remains robust. Stablecoin inflows to exchanges rose 2.8% over the past 48 hours, suggesting that dip-buying demand may already be forming at these levels.
Analysts: A Healthy Correction Before the Next Leg Up
Technical analysts say that while Bitcoin’s dip under $110,000 might look alarming, it fits within a broader bullish structure that remains intact.
“BTC is still respecting its ascending channel on the weekly timeframe,” noted CryptoCon, a pseudonymous market analyst. “The key support zone lies around $108,000–$109,000. As long as we stay above that range, the path to $125,000 remains open.”
Other indicators, such as the relative strength index (RSI), have cooled from overbought territory, hinting that momentum could rebuild once short-term volatility subsides.
Bottom Line: A Temporary Shakeout
Bitcoin’s drop below $110,000 serves as a reminder that even in a strong bull cycle, corrections are part of the process. The liquidation event flushed out leveraged excess, potentially setting the stage for a more stable advance.
As ETF inflows continue and the Fed’s stance on interest rates evolves, analysts expect Bitcoin to retest the $115,000–$120,000 range before the end of the month — provided it holds above its near-term support zone.
“Every cycle has these washouts,” Edwards added. “It’s not the end of the bull market — it’s a stress test for conviction.”
