Bitcoin (BTC) briefly soared past $89,000 in early Asian hours on Tuesday, only to experience a sharp correction that saw its price dip to as low as $87,000. This dramatic price movement capped a wild trading session that extended Bitcoin’s seven-day gains to over 32%, a sign of its ongoing bullish momentum. However, the volatility also led to significant liquidations, with nearly $700 million wiped out from crypto-tracked futures.
The majority of the liquidations came from traders betting on price movements. Approximately $380 million worth of bearish positions (short bets) evaporated, while $290 million in bullish bets also vanished. This surge in liquidations marks the highest figure seen since early April, when Bitcoin crossed its previous peak of over $73,000. The market has been in flux, with short-term traders facing heightened risks amid increasing volatility.
Dogecoin (DOGE) also saw a major rally, rising over 40% to nearly 41 cents. The surge coincided with increased attention on Dogecoin’s most prominent supporter, Elon Musk, as his proximity to President-elect Donald Trump fueled optimism. The overall crypto market sentiment seemed buoyed by these developments, with several major assets experiencing notable moves.
BTC-tracked futures recorded over $200 million in short liquidations alone, with $40 million in bearish Ether (ETH) trades also wiped out. Meanwhile, other altcoins such as Solana (SOL) and Aptos (APT) saw more than $25 million in losses each. These unusually large figures suggest that traders are returning to riskier bets in a sign of renewed optimism across the market.
The funding rates for some altcoin futures have surged to over 30% annualized, according to Coinglass data, indicating heightened demand for leveraged positions. This spike in funding rates highlights the increased appetite for riskier assets as traders speculate on the future direction of Bitcoin and other major cryptocurrencies.
The sharp rise in Bitcoin’s price came on the heels of a bullish weekend and is being fueled by expectations of further gains following the Republican victory in the U.S. presidential elections. Analysts predict that a Republican sweep could push the total crypto market capitalization to $10 trillion by 2026, a significant leap from the current $3 trillion. With this optimism in mind, some analysts have set their sights on a Bitcoin price of $100,000 by the end of the year.
However, some caution remains. Traders are warning that the surge above $89,000 could prompt a price correction in the short term, particularly if leveraged positions become overextended. There is also the risk of a “leverage washout” if Bitcoin crosses the $90,000 threshold, potentially slowing its ascent toward the $100,000 mark.
As Bitcoin and the broader crypto market continue to show signs of volatility, traders will need to carefully navigate this environment of rising risks and potential rewards. The next few days could be pivotal in determining whether Bitcoin can sustain its bullish momentum or if a correction is in the cards.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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