Bitcoin drops 4.5% from daily high as derivatives markets unwind leverage
Bitcoin fell to $72,620 on Thursday, triggering $935.6 million in liquidations across crypto derivatives markets as traders repositioned around critical support levels.
The sell-off erased all gains made since April 13, according to market data. More than $80 billion was wiped from the total crypto market over the preceding 24 hours. Long positions bore the brunt: $874 million in long liquidations occurred across derivatives exchanges, including $348.5 million in Bitcoin longs and $228.5 million in Ether longs.
The largest single liquidation was a $15.34 million BTC-USD long position on Hyperliquid, according to CoinGlass data.
Renewed military tensions contributed to the decline. “Renewed US-Iran fighting overnight sent us lower with mass liquidations,” said Nicrypto, an analyst tracking the market. “We have fallen well below the previous $75K support zone and are now at the critical $73K support.”
Bitcoin had reached a daily high of $76,050 on Wednesday before the reversal, a 4.5% deviation from Thursday’s low. The decline coincided with a sharp contraction in derivatives leverage. Bitcoin futures open interest fell 9.8% on the Chicago Mercantile Exchange and 9% on BingX over 24 hours, according to SoSoValue data.
Declining open interest signals reduced leverage and market participation, often indicating bearish sentiment among traders.
Spot Bitcoin ETF outflows accelerated the pressure. US spot Bitcoin ETFs recorded net outflows of $733 million on Wednesday alone, part of an eight-day outflow streak totaling $2.6 billion. Global Bitcoin investment products posted $1.3 billion in outflows last week.
Michael van de Poppe, founder of MN Capital, characterized the sell-off as a “standard approach” typical of month-end rebalancing by asset managers. However, he flagged $71,400 to $73,400 as a critical support zone.
“Bitcoin showing weakness isn’t a recipe for a new low, unless it drops under the $71,400-$73,400 support area,” van de Poppe said. “This is my last stance of an important support zone; otherwise, I’d expect lower $60Ks to be tested for support.”
A break below $70,000 could accelerate selling toward $65,000, representing an 11.4% decline from current levels. The $73,000 level, corresponding to the 100-day simple moving average, represents another key technical floor.
Historical precedent suggests further downside risk. Between January 14 and February 6, a 30% decline in open interest accompanied a 38% drop in Bitcoin price, according to market records reviewed by CoinGlass and SoSoValue.
Traders are now watching whether Bitcoin holds $70,000 as the last line of defense before testing deeper support near $60,000.
