ANOTHER $1 BILLION WIPEOUT: WHY IS BITCOIN SEEING EXTREME PRICE MOVES?

The cryptocurrency market, particularly Bitcoin, has been on a rollercoaster ride, leaving investors both exhilarated and terrified.Imagine waking up to news of Bitcoin briefly touching the coveted $100,000 mark, a moment of sheer euphoria for many. The last known price of Bitcoin is 103,694. USD and is down -1.16 over the last 24 hours. It is currently trading on active market(s) with $61,955,978,178.38 traded over the last 24But the celebration was short-lived.Almost as quickly as it surged, Bitcoin plunged, triggering a cascade of liquidations and wiping out nearly $1 billion in leveraged positions. Nearly $1 billion worth of Bitcoin futures contracts have been wiped out once again. Continue reading Another $1 billion wipeout:This isn't an isolated incident. The core CPI, which strips out food and energy prices, also landed at 3.1%, its lowest level since April 2025. The market initially reacted positively to the softer CPI data. Bitcoin pushed above $84,000, and altcoins saw double-digit gains. The S P 500 and Nasdaq 100 also recorded slight upticks. But the optimism didn t last.We've seen similar events unfold recently, including a sharp drop from $41,000 to $30,500 in January, leading to billions in futures contracts being liquidated. Nearly $1 billion worth of Bitcoin (BTC) futures contracts were liquidated on Jan. 13, a day after the big shakeout. The continuous loop of liquidations is causing extreme volatility and largeThese wild price swings and massive liquidations have become a concerning trend, leaving many wondering: what's driving this extreme volatility in the Bitcoin market?Why are these ""billion-dollar wipeouts"" becoming so frequent?And what can investors do to navigate this turbulent landscape?

In this article, we'll delve into the factors contributing to Bitcoin's extreme price volatility, examining the role of leveraged trading, market sentiment, and external economic influences.We'll explore the mechanics of futures liquidations, understand why they exacerbate price swings, and provide insights into how you can protect yourself from becoming a victim of these market shakeouts. Watch NEWSMAX2 LIVE for the latest news and analysis on today's top stories from your favorite NEWSMAX personalities. NEWSMAX2 WEEKDAYS: 7 AM ETWhether you're a seasoned crypto trader or just starting to explore the world of digital assets, understanding these dynamics is crucial for making informed investment decisions and navigating the inherent risks of the Bitcoin market.

Understanding Bitcoin Futures Liquidations

To understand the volatile nature of Bitcoin's price action, it's essential to grasp the concept of futures liquidations. Another $1 billion wipeout: Why is Bitcoin seeing extreme price moves? Janu Nearly $1 billion worth of Bitcoin futures contracts have been wiped out once again.Bitcoin futures contracts are agreements to buy or sell Bitcoin at a predetermined price on a future date.They allow traders to speculate on Bitcoin's price movements without actually owning the underlying asset.This can be attractive because it enables traders to use leverage, amplifying their potential profits (and losses).

However, leverage is a double-edged sword.When a trader's bet goes against them, and the price of Bitcoin moves in the opposite direction of their position, they risk having their position ""liquidated."" Liquidation occurs when the trader's account balance falls below a certain threshold, and the exchange automatically closes their position to prevent further losses.These forced liquidations can create a domino effect, particularly in a highly leveraged market like Bitcoin.

How Liquidations Amplify Volatility

When a significant number of traders are using high leverage, even a relatively small price movement can trigger a wave of liquidations. A Private Investor is a recipient of the information who meets all of the conditions set out below, the recipientAs positions are forcibly closed, it creates sudden selling pressure (or buying pressure if short positions are being liquidated), which further drives down (or up) the price.This can lead to a cascade of liquidations, as more and more traders are caught on the wrong side of the trade.This ""liquidation cascade"" is often the primary driver behind the extreme price swings we've been witnessing in the Bitcoin market.

For example, consider the event where Bitcoin briefly touched $100,000 before crashing to $90,000. Nearly $1 billion worth of Bitcoin (BTC) futures contracts were liquidated on Jan. 13, a day after the big shakeout. The continuous loop of liquidations is causing extreme volatility and large price swings in the cryptocurrency market. Total Bitcoin liquidations. Source: Bybt.com What are futures liquidations, and why are so many Bitcoin positions being liquidated?This sudden drop triggered nearly $1 billion in liquidations, impacting over 150,000 traders.The sheer volume of these liquidations intensified the downward pressure on the price, creating a feedback loop that exacerbated the crash.

• Example: A trader uses 10x leverage to bet on Bitcoin rising. Another $1 billion wipeout: Why is Bitcoin seeing extreme price moves?Source: CointelegraphPublished onIf Bitcoin's price falls by just 10%, their position is likely to be liquidated.
• Domino Effect: Liquidations trigger further price drops, leading to more liquidations.
• Amplified Volatility: This creates significant price swings, both upwards and downwards.

Factors Contributing to Bitcoin's Price Volatility

While liquidations play a significant role in amplifying price swings, several underlying factors contribute to Bitcoin's inherent volatility.These factors can be broadly categorized into market sentiment, macroeconomic influences, and regulatory uncertainty.

Market Sentiment and the Fear & Greed Index

The cryptocurrency market is heavily driven by sentiment. When Bitcoin saw the big 20% drop from $41,000 to $30,500 on Jan. 12, nearly $2 billion worth of futures contracts were liquidated. However, within 24 hours, another $1 billion worth of contractsFear and greed can quickly spread among investors, leading to irrational buying and selling behavior.Tools like the Crypto Fear & Greed Index are used to gauge the overall market sentiment.When the index is high, indicating ""Extreme Greed,"" investors are often overly optimistic, and the market may be due for a correction.Conversely, when the index is low, indicating ""Extreme Fear,"" investors are often overly pessimistic, and the market may be oversold.

Sudden events, such as news of a major exchange hack or regulatory crackdown, can quickly shift market sentiment from greed to fear, triggering a sell-off. Factors including rampant inflation and an imminent interest rate hike from the U.S. Federal Reserve, along with an issue at Celsius, are behind the sell-off.Social media and online forums also play a significant role in shaping market sentiment, as rumors and misinformation can spread rapidly, influencing trading decisions. Bitcoin liquidations totaled $244 million, with key liquidity zones around $94,400 $95,500. A drop below $99,000 could trigger $1.3 billion in liquidations, intensifying selling pressure. Bitcoin s liquidation heatmap has revealed a significant 100x-long liquidation event within the past 48 hours.The recent drop in the Crypto Fear & Greed Index to 17, signaling Extreme Fear, highlights the impact of negative events on investor psychology.

Macroeconomic Influences and Market Events

Bitcoin, like other assets, is not immune to macroeconomic forces. Bitcoin breaks above $100,000, reaching three-month high of nearly $104,000 after Trump trade announcements and record ETF inflows surpassing $40 billion. Bitcoin price surged to nearly $104,000, reaching a three-month high The rally followed Trump s UK trade deal announcement and hints atFactors such as inflation, interest rate hikes, and overall economic uncertainty can all impact its price.For instance, the core CPI (Consumer Price Index), which excludes food and energy prices, can influence market sentiment. 3.8K subscribers in the AllThingsCrypto community. A sub to discuss cryptocurrnecy.The initial positive reaction to a lower-than-expected CPI reading, followed by a subsequent downturn, illustrates how market optimism can be fleeting in the face of broader economic concerns. Kobeissi analysts pointed to the money supply dropping by $4.1 trillion, to $104.4 trillion, the lowest since August, after hitting a peak of $108.5 trillion in October.Even events seemingly unrelated to crypto, such as trade deal announcements, can influence Bitcoin's price due to their impact on overall market risk appetite.

Events like the collapse of FTX can have a devastating impact on market confidence and contribute to increased volatility.Such failures undermine trust in the crypto ecosystem and can lead to widespread selling pressure. The crypto market s euphoria suddenly stopped on Dec. 5 after Bitcoin (BTC) briefly touched the long-anticipated $100,000 mark before plunging back to $90,000 in a dramatic flash crash. The rapid downturn wiped out nearly $1 billion in long and short positions, leaving traders reeling.These events also increase regulatory scrutiny, which can further dampen investor enthusiasm.

Regulatory Uncertainty and Its Impact

Regulatory uncertainty remains a significant headwind for the cryptocurrency market. The live Bitcoin price today is $99,010.03 USD with a 24-hour trading volume of $66,852,801,069 USD. We update our BTC to USD price in real-time. Bitcoin is down 1.37% in the last 24 hours. The current CoinMarketCap ranking is 1, with a live market cap of $1,959,464,647,535 USD.The lack of clear and consistent regulations across different jurisdictions creates ambiguity and makes it difficult for institutional investors to participate. Top cryptocurrency prices and charts, listed by market capitalization. Free access to current and historic data for Bitcoin and thousands of altcoins.News of potential regulatory crackdowns or outright bans in certain countries can trigger sharp price declines.Conversely, positive regulatory developments, such as the approval of Bitcoin ETFs, can boost investor confidence and drive prices higher.The ongoing debate about how to classify cryptocurrencies and the appropriate regulatory framework continues to contribute to market volatility.

Analyzing Recent Bitcoin Price Movements

Let's analyze some recent examples of Bitcoin's extreme price swings to understand the interplay of these factors.

The December 5th Flash Crash

On December 5th, Bitcoin briefly touched the $100,000 mark before plummeting back to $90,000 in a dramatic flash crash. The cryptocurrency market is in turmoil, with traders facing massive losses as liquidations near the $1 billion mark. The total crypto market cap has dropped to $2.62 trillion, with Bitcoin taking the hardest hit. This sudden crash has triggered widespread fear, pushing the Crypto Fear Greed Index down to 17 signaling Extreme Fear.This event wiped out nearly $1 billion in leveraged positions, highlighting the risk of excessive leverage in the market.Several factors likely contributed to this crash, including:

• Overleveraged Positions: A large number of traders were using high leverage to bet on Bitcoin's continued rise, making them vulnerable to a sudden price drop.
• Profit-Taking: As Bitcoin approached $100,000, some investors likely decided to take profits, triggering a sell-off.
• Algorithmic Trading: Automated trading algorithms may have exacerbated the price decline by triggering sell orders based on pre-set parameters.

The January Shakeout

In January, Bitcoin experienced a significant correction, falling from around $41,000 to $30,500.This shakeout resulted in nearly $2 billion worth of futures contracts being liquidated. Another $1 billion wipeout: Why is Bitcoin seeing extreme price moves? Nearly $1 billion worth of Bitcoin futures contracts have been wiped out once again.The factors contributing to this decline included:

• Market Overheating: Bitcoin had experienced a strong rally in the preceding months, leading to concerns about a potential correction.
• Profit-Taking: Similar to the December flash crash, some investors likely took profits after the rally.
• Macroeconomic Concerns: Rising inflation and the prospect of interest rate hikes may have dampened investor sentiment.

Bitcoin's Surge to Nearly $104,000

Despite the volatility, Bitcoin has also shown remarkable resilience. For the past week, Bitcoin s price has been in a key support area between $97,000 and $93,800. If the asset s value drops below this range, we could see a sharp drop to $70,000, as there is minimal support below it. Unfortunately, BTC s price is currently hanging at the bottom end of this range. Key Support Area for Bitcoin Price.The recent surge to nearly $104,000, reaching a three-month high, demonstrates the potential for significant price appreciation.This rally was fueled by several factors, including:

• Trump Trade Announcements: Positive news related to trade deals boosted overall market sentiment, benefiting Bitcoin.
• Record ETF Inflows: Significant inflows into Bitcoin ETFs signaled increased institutional adoption and demand.

Strategies for Navigating Bitcoin's Volatility

Given the inherent volatility of Bitcoin, it's crucial for investors to adopt strategies to mitigate risk and protect their capital. A flash crash triggered over $1 billion in liquidations, marking one of the largest sell-offs since FTX s 2025 collapse. Coinglass data reveals nearly $900 million in Bitcoin positions were liquidated as its price plummeted from $100,000 to $90,000 before rebounding to $97,000. Bitcoin Marks Largest Multi-Year Liquidation EventHere are some actionable tips:

Reduce Leverage

One of the most effective ways to protect yourself from liquidations is to reduce your leverage. The largest single liquidation order took place on Binance in the ETHUSDT pair, valued at $19.69 million. Of the $1.7 billion in total liquidations, $1.55 billion involved long positions. Notably, Bitcoin s leverage flush was relatively modest compared to that of altcoins, with $143 million in BTC longs liquidated.While leverage can amplify potential profits, it also significantly increases your risk of losses.Consider using lower leverage or avoiding it altogether, especially if you're a beginner. Bitcoin s recent surge to the long-anticipated $100,000 mark was a moment of celebration for the crypto community until it wasn t. The digital asset quickly plummeted to $90,000 on December 5. This dramatic flash crash wiped out nearly $1 billion in leveraged positions across the cryptocurrency market.Remember, even experienced traders can get caught out by sudden market movements.

Use Stop-Loss Orders

Stop-loss orders are essential tools for managing risk. Nearly $1 billion worth of Bitcoin futures contracts have been wiped out once again. Nearly $1 billion worth of Bitcoin (BTC) futures contracts were liquidated on Jan. 13, a day after the big shakeout. The continuous loop of liquidations is causing extreme volatility and large price swings in the cryptocurrency market.Total Bitcoin liquidations. Source: Bybt.comWhat MoreA stop-loss order automatically closes your position when the price reaches a predetermined level, limiting your potential losses. Ethereum just suffered a $1.4B hack, draining Bybit s cold wallet in one of the biggest crypto exploits ever. Now, the crypto world is split should EthereumSet your stop-loss orders at levels that you are comfortable with, considering your risk tolerance and investment strategy.Don't set them too close to the current price, as this can lead to premature liquidation due to minor price fluctuations.

Diversify Your Portfolio

Diversification is a fundamental principle of investing. cointelegraph.com: Nearly $1 billion worth of Bitcoin futures contracts have been wiped out once again.Don't put all your eggs in one basket. Nearly $1 billion worth of Bitcoin futures contracts have been wiped out once again. from Cointelegraph.com News via IFTTTSpread your investments across different asset classes, including other cryptocurrencies, stocks, bonds, and real estate.This can help cushion your portfolio against losses in any single asset.

Stay Informed and Monitor Market Sentiment

Stay informed about the latest news and developments in the cryptocurrency market. Bitcoin s Surge: Briefly hit $100,000 before crashing to $90,000 was due to leverage traders. Market Impact: Nearly $1 billion in liquidations, affecting over 150,000 traders. Institutional Confidence: Major players like BlackRock and MARA used the dip to increase their Bitcoin holdings.Monitor market sentiment using tools like the Crypto Fear & Greed Index.Be aware of potential risks and opportunities and adjust your investment strategy accordingly.Remember to be skeptical of information you encounter online and do your own research before making any investment decisions.Don't fall victim to FOMO (Fear Of Missing Out) or FUD (Fear, Uncertainty, and Doubt).

Consider Dollar-Cost Averaging (DCA)

Dollar-Cost Averaging (DCA) is a strategy where you invest a fixed amount of money at regular intervals, regardless of the price. Quase US $ 1 bilh o em contratos futuros de Bitcoin foram liquidados no dia 13 de janeiro, um dia ap s um grande abalo no mercado. O ciclo cont nuo de liquida es est causando extrema volatilidade e grandes oscila es de pre os no mercado de criptomoedas. Total de liquida es de Bitcoin. Fonte: Bybt.comThis can help smooth out your returns and reduce the impact of volatility.By buying more Bitcoin when the price is low and less when the price is high, you can potentially lower your average cost per coin over time.

Use Risk Management Tools on Exchanges

Familiarize yourself with the risk management tools offered by cryptocurrency exchanges.Many exchanges provide features such as position limits, margin alerts, and liquidation protection. However, in the last two days, open interest has started climbing back, adding over $1 billion as of Mar. 13, in sync with BTC s price recovery. The heavy ETF outflows and dropping open interest paint a picture of institutional hesitation and reduced speculative activity over the past few weeks.Use these tools to manage your risk and prevent excessive losses.

The Future of Bitcoin Volatility

Will Bitcoin's extreme volatility persist? Latest Bitcoin News: Another $1 billion wipeout: Why is Bitcoin seeing extreme price moves?: bitamp cryptocurrency bitcoinnewsIt's difficult to say for sure, but several factors suggest that volatility may gradually decrease over time.As the cryptocurrency market matures, institutional adoption increases, and regulatory clarity improves, Bitcoin is likely to become more stable.

However, volatility is inherent to any emerging asset class, and Bitcoin is still a relatively young and evolving technology.Expect periods of high volatility to continue, particularly during times of market uncertainty or regulatory change. By Jess Sharp, Money live reporter . When Graham Hornigold first heard from his mum, he was delighted, full of excitement and anticipation . He had gone more than 40 years without seeing herThe key is to understand the risks, adopt appropriate risk management strategies, and invest responsibly.

Institutional Adoption and Market Maturity

Increased institutional adoption is likely to play a key role in reducing Bitcoin's volatility. Main Points: Massive Liquidation Event: In late May 2025, renowned Hyperliquid trader James Wynn suffered forced liquidations totaling nearly $100 million in Bitcoin positions when BTC plunged below $105,000. Extreme Leverage and Risk: Wynn used 40 leverage on $20 million of collateral to control over $1 billion in BTC exposure, illustrating how high leverage canAs more institutions enter the market, they bring with them greater capital and more sophisticated trading strategies. A blog about earn money online, bitcoin, eth, news, technology, review, ptc, money online, cloud mining, scam site, crypto, icoThis can help stabilize prices and reduce the impact of sudden price swings.

Regulatory Clarity

Clear and consistent regulations are essential for the long-term growth and stability of the cryptocurrency market.As regulators around the world develop comprehensive frameworks for digital assets, it will reduce uncertainty and encourage greater institutional participation.This, in turn, should help to reduce volatility.

FAQ: Addressing Common Concerns About Bitcoin Volatility

Here are some frequently asked questions about Bitcoin's volatility:

Is Bitcoin a Safe Investment?

Bitcoin is a high-risk, high-reward investment.Its volatile nature means that you could potentially lose a significant portion of your investment.However, it also offers the potential for significant gains.Whether Bitcoin is a ""safe"" investment depends on your individual risk tolerance and investment goals.If you're risk-averse, you may want to consider allocating only a small portion of your portfolio to Bitcoin or avoiding it altogether.

How Can I Predict Bitcoin's Price Movements?

Predicting Bitcoin's price movements is extremely difficult.There are numerous factors that can influence its price, including market sentiment, macroeconomic conditions, regulatory developments, and technological advancements.While technical analysis and fundamental analysis can provide some insights, they are not foolproof.Be wary of anyone who claims to be able to accurately predict Bitcoin's price movements.

Should I Buy Bitcoin During a Dip?

Buying Bitcoin during a dip can be a profitable strategy, but it's important to do your research and assess the risks.Make sure you understand why the price is dipping and whether the underlying fundamentals of Bitcoin remain strong.Don't try to ""catch a falling knife"" by buying too soon, as the price could continue to decline.Consider using dollar-cost averaging to gradually build your position over time.

What is the Best Way to Store Bitcoin?

The best way to store Bitcoin depends on your individual needs and risk tolerance.There are several options available, including:

• Hardware Wallets: Hardware wallets are physical devices that store your Bitcoin offline, providing a high level of security.
• Software Wallets: Software wallets are applications that you can install on your computer or smartphone.They are convenient but generally less secure than hardware wallets.
• Exchange Wallets: Exchange wallets are accounts that you hold on cryptocurrency exchanges.They are convenient for trading but can be risky, as you don't control your private keys.

Conclusion: Navigating the Bitcoin Landscape

Bitcoin's extreme price moves, often resulting in billion-dollar wipeouts, are a consequence of several factors, including leveraged trading, market sentiment, macroeconomic influences, and regulatory uncertainty.While this volatility can be unnerving, understanding the underlying dynamics is crucial for making informed investment decisions.By adopting risk management strategies such as reducing leverage, using stop-loss orders, diversifying your portfolio, and staying informed, you can navigate the Bitcoin landscape more effectively and protect your capital.Remember that Bitcoin is a high-risk, high-reward investment, and it's essential to invest responsibly and only what you can afford to lose.

While past performance is not indicative of future results, the resilience of Bitcoin and the continued growth of the cryptocurrency market suggest that Bitcoin's long-term potential remains significant.By staying informed, managing your risk, and adopting a long-term perspective, you can position yourself to potentially benefit from the future growth of Bitcoin and the broader cryptocurrency ecosystem.Don't just sit on the sidelines – take the time to educate yourself, understand the risks, and develop a sound investment strategy.And remember, never invest more than you can afford to lose.Consider consulting with a financial advisor to determine if Bitcoin is right for your portfolio.Now, what steps will you take today to better understand and manage your risk in the cryptocurrency market?