Bitcoin fell as much as 2.4% on Wednesday to about $83,600, slipping below $84,000 as roughly $550 million in leveraged crypto bets were liquidated over the past 24 hours, according to CoinGlass.
Liquidations happen when an exchange closes a trader’s position automatically because losses on borrowed funds can no longer be covered. Most of the forced closures hit long positions, or traders who had been betting on higher prices.
Major tokens also moved lower
Ether dropped nearly 4% to about $2,590. XRP lost about 4%, while SOL fell more than 3%.
Dan Khus, chief analyst at LVRG Research, told Bloomberg the decline looked like "a leverage flush instead of a downward trend."
$84,000 breaks as traders watch the next level
The move pushed bitcoin below $84,000, a level FxPro had flagged on Tuesday as the point where sellers would take control. The recent low near $83,000 is now the next test.
Broader risk appetite weakened
Risk sentiment also cooled across wider markets. Renewed Iranian attacks in the Strait of Hormuz reduced hopes that shipping through the waterway would return to normal and pushed Brent crude above $101 a barrel.
At the same time, the 10-year U.S. Treasury yield climbed back above 5.3%, and Europe’s Stoxx 600 ended a three-day winning streak. U.S. stock futures were little changed after the S&P 500 closed at a record.
Fed minutes due later Wednesday
Minutes from the Federal Reserve’s last meeting are due later on Wednesday. Rachael Lucas, an analyst at BTC Markets, told Bloomberg that a hawkish reading could send yields and the dollar higher and keep risk assets under pressure.