Major Cryptocurrencies Slide as Macro Shocks Trigger $360 Million in Liquidations

Sharp Price Declines and Liquidations

At around 7:20 p.m. ET on Sunday, bitcoin began a rapid decline from approximately $67,600 to near $64,700, losing more than 4% in under two hours, according to The Block's price page. Other leading digital assets moved in tandem: ether dropped 5.77% in the past 24 hours to $1,861, XRP fell 6.42% to $1.33, and Solana declined 8.3% to $77.6.

The downturn intensified as leveraged long positions were liquidated. Coinglass data indicated that close to $360 million in long positions were liquidated in the hour leading up to 8:57 p.m. ET, exacerbating selling pressure across the crypto market.

BTC Markets crypto analyst Rachael Lucas said the move reflected “a confluence of macro shocks hitting a market that was already fragile,” noting that “the liquidity conditions to absorb a shock like this simply were not there” amid five consecutive weeks of bitcoin ETF outflows and spot volumes down 59% week on week.

Macro, Geopolitical, and Policy Drivers

Lucas cited “geopolitical chaos out of Mexico” and weak U.S. housing data as key elements weighing on broader risk sentiment. Mexican security forces killed Nemesio “El Mencho” Oseguera, leader of one of the country’s largest cartels, triggering widespread violence and prompting international airlines to suspend flights to Mexico.

In the United States, pending home sales fell 0.8% in January to an all-time low of 70.9 since tracking began in 2001, adding to economic uncertainty. At the same time, President Donald Trump announced an increase in the blanket tariff on all U.S. imports from 10% to 15%, following an earlier Supreme Court ruling against his emergency tariffs. Reuters reported that the announcement weighed on Wall Street futures and the U.S. dollar.

Kronos Research CIO Vincent Liu highlighted a sharp surge in the Japanese yen, driven by speculation that the Bank of Japan may move toward further monetary tightening. He said the yen’s move forced funds to deleverage, worsening the global sell-off in risk assets.

Liu pointed to $60,000 as a key support level for bitcoin, adding that reclaiming $65,000–$66,000 could help stabilize the asset, while a move toward $70,000 would signal a rebound dependent on macro flows. He said potential relief could come from renewed ETF inflows, clearer regulatory signals, or Thursday’s initial jobless claims data.

Mixed Market Signals and Regulatory Outlook

Despite the sharp drawdown, Lucas stated that the broader crypto picture is not “uniformly bearish.” She noted that large holders added 200,000 BTC over the past month and highlighted bitcoin’s short-term Sharpe ratio recently reaching -38.38, a level previously seen around cycle lows in 2015, 2019, and 2022 before subsequent recoveries.

On the regulatory front, Lucas pointed to the CLARITY Act’s progress in the U.S. Senate as a potential catalyst, arguing that clearer rules could help draw institutional capital back into the market. She said the current setup leaves timing “heavily” dependent on how quickly macro uncertainty resolves.

FAQ

What caused the latest drop in bitcoin and other cryptocurrencies?
The decline was driven by a combination of fragile crypto market liquidity, large liquidations of leveraged long positions, and broader macro shocks, including geopolitical unrest in Mexico, weak U.S. pending home sales data, changes to U.S. tariff policy, and currency market moves tied to expectations around Bank of Japan policy.

How much was liquidated during the sell-off?
Coinglass data showed close to $360 million in long positions were liquidated in the hour leading up to 8:57 p.m. ET on Sunday.

What key price levels are analysts watching for bitcoin?
Vincent Liu highlighted $60,000 as an important support level, with a potential stabilization if bitcoin can reclaim $65,000–$66,000, and a possible rebound signaled around $70,000, contingent on broader macro flows.

Are there any positive signals for the crypto market despite the sell-off?
Lucas pointed to whale accumulation of about 200,000 BTC over the past month, bitcoin’s historically low short-term Sharpe ratio associated with past cycle lows, and potential regulatory clarity from the CLARITY Act as supportive factors over time.