Bitcoin has experienced a sharp sell-off, falling below $81,000 for the first time since September 21, driving overall crypto market liquidations to more than $480 million within a single hour. The sudden market plunge disproportionately impacted leveraged long positions, pushing total 24-hour liquidations toward $900 million across more than 150,000 traders, according to tracking data from CoinGlass.
Key Takeaways
- Bitcoin fell below $81,000 for the first time since breaking out on September 21.
- Hourly liquidations surpassed $480 million, with 24-hour liquidations approaching $900 million across more than 150,000 traders.
- The sell-off coincided with a U.S. government wallet transfer of Bitfinex hack funds to Coinbase Prime.
- Ethereum (ETH) dropped to $2,450, while XRP was rejected at $1.50 and declined to $1.34.
U.S. Government Transfers Trigger Sell-Off
The price collapse follows consecutive transfers of cryptocurrency by the U.S. government. A day prior, Bitcoin dropped by $2,000 in 20 minutes after federal wallets moved assets to Coinbase Prime. While Bitcoin temporarily stabilized near $84,000, selling pressure resumed as onchain tracking firm Lookonchain identified another U.S. government transfer involving Bitcoin originally seized from the Bitfinex hack.
This renewed selling pressure accelerated downside momentum, breaking past prior support levels as traders faced automated forced liquidations. The sharp drop comes as broader crypto asset volatility leaves leveraged positions vulnerable during sudden market drawdowns. Bitcoin's recent market movement had previously seen prices hover above $83,000 before this latest breakdown.
Altcoin Market Follows Downward Trend
Major altcoins followed Bitcoin lower as market-wide leverage unraveled. Ethereum (ETH), which traded above $2,700 just 48 hours ago, dropped to $2,450, testing key support levels as Ethereum faces sell-off pressure. Meanwhile, XRP faced strong resistance, getting rejected at $1.50 before falling to $1.34 as XRP support levels came under pressure. Additional sharp declines were registered across SOL, HYPE, and DOGE.
Why It Matters
The concentrated liquidation cascade demonstrates how institutional-scale government transfers can act as sudden catalysts in thin market conditions. When large quantities of seized digital assets are routed to exchanges like Coinbase Prime, spot traders react preemptively, triggering liquidations on leveraged long positions that compound sell-off momentum. Market participants will be closely watching whether U.S. government wallets initiate further transfers, as well as whether Bitcoin can re-establish structural support above the $80,000 threshold.
