Crypto market volatility triggers $2.5 billion in bitcoin liquidations

• Bitcoin fell from a record high above $126,000 to as low as $104,783 during October 10-11, currently trading around $78,396 after Saturday's 6% drop
• Microsoft's Azure cloud revenue growth only slightly exceeded expectations, raising concerns about AI spending and impacting broader risk sentiment
• Gold recorded its steepest daily fall since 1983 and silver its largest drop following Warsh's Fed nomination, which markets interpret as leaning hawkish with expected rate cuts and tighter balance-sheet policy

Summary: Crypto Market Volatility Triggers $2.5 Billion in Bitcoin Liquidations

Bitcoin investors liquidated $2.56 billion in positions over recent days as cryptocurrencies tumbled alongside broader risk-asset sell-offs, according to CoinGlass data. Bitcoin dropped 6% on Saturday and was trading around $78,396, well below its recent record high above $126,000 set just weeks earlier. The cryptocurrency fell as low as $104,782.88 during October 10-11.

Key Market Drivers:

The crypto selloff was triggered by multiple factors impacting risk sentiment:

• Microsoft's Azure cloud revenue growth disappointed expectations, dampening enthusiasm for AI spending
• President Trump's nomination of Kevin Warsh as Fed chair sparked expectations of rate cuts paired with tighter balance-sheet policy, viewed as hawkish
• A sharp precious metals sell-off followed the Warsh announcement, with gold experiencing its steepest daily decline since 1983 and silver posting record losses

Market Implications:

Analysts emphasized crypto's heightened sensitivity to risk-off sentiment. While these liquidations are below levels seen after Trump's earlier China tariff announcements, they demonstrate the market's fragility. Thin weekend liquidity exacerbated bitcoin's downward moves.

"The biggest risk to prices at these levels have been outside forces," noted Jim Ferraioli of Charles Schwab, citing potential unemployment spikes or AI trade deterioration.

Adam McCarthy of Kaiko suggested investors are "reassessing their risk frameworks" in the current environment. David Morrison of Trade Nation observed that "investors were looking for an excuse to lighten up and they finally got several."

The cascading liquidations affected both long and short positions, highlighting the challenging environment for cryptocurrency traders amid macroeconomic uncertainty.