The cryptocurrency market faced a sharp downturn on Wednesday, October 7, dropping over 2.7% and erasing more than $121 billion in total market value. Bitcoin led the decline as a wave of forced selling swept across crypto exchanges.
Bitcoin Drops Below $83K
Bitcoin price fell as much as 3.3%, sliding from $85,550 down to $82,833. Ethereum experienced a steeper drop, tumbling 5.3% to $2,560, while altcoins like XRP and Solana fell 4.5% and 3.3%, respectively.
Over $600 Million Liquidated in 24 Hours
Data from CoinGlass shows that the sudden price drop triggered over $612 million in leveraged position liquidations within a 24-hour window.
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Short positions accounted for $550.27 million of the liquidations, while long positions accounted for $61.95 million.
Among the liquidated long positions, Bitcoin accounted for about $153.92 million and Ether for $217.07 million. The scale of the liquidations shows how leverage can amplify a move that starts with a relatively modest decline in prices.
Bitcoin Falls Even as Stocks Surge
The weakness in digital assets stands out because US stocks were moving in the opposite direction.
On October 6, the S&P 500 rose 0.58% to a record close of 7,818.93. The Dow Jones Industrial Average gained 0.49% to 51,521.28, while the Nasdaq Composite rose 0.45% to 27,599.79, also reaching a record close.
The rally was supported by technology stocks, including AI-related chipmakers Nvidia and AMD, while easing Treasury yields and oil prices also helped sentiment.
Glassnode Warns of Weak Bitcoin Demand
Crypto market analysis firm Glassnode said in its October 7 review that Bitcoin’s spot market still looks fragile, making a sustained move above $85,000 difficult.
Over the past 30 days, roughly $4.9B of new money entered through ETFs, stablecoins, and corporate buying. Bitcoin’s Realized Cap increased by about $12.8B, meaning less than 40% of that increase came from genuinely new capital.
At the same time, recent BTC buyers started taking profits as Bitcoin moved above $85K. On October 4, around 86% of Bitcoin flowing onto exchanges came from short-term holders selling at a profit. Glassnode says this is unusually high, and it could create additional selling pressure if BTC tries to rally toward $85K again.
Options traders remain bullish, but there are significant liquidation zones below the current price. The closest is $81.7K–$83.3K, followed by ~$75K and a much larger zone at $60K–$63K.
On the upside, a large concentration of short positions sits around $87K–$96K, with the biggest cluster near $92K. If Bitcoin breaks above ~$86.5K and keeps rising, those short positions could be liquidated, potentially adding fuel to the move higher.
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