On Thursday, global markets experienced a violent wave of tech sell-offs, and as risk appetite deteriorated, cryptocurrencies, stocks, and precious metals all fell simultaneously. Bitcoin dropped below 85K yesterday, marking the first time since November last year, with a 24-hour decline of 5.51%, and over $1 billion in leveraged positions were forced to liquidate.

Bitcoin Falls Below 85K, Over $1 Billion Liquidated Across the Network

Bitcoin has been hit with multiple misfortunes lately. First, traders have been selling off cryptocurrencies and shifting investments into gold and silver to hedge against macroeconomic risks from dollar depreciation. Yesterday, as precious metal prices fell, Bitcoin once again confirmed its status as a leveraged beta tool for risk assets.

Bitcoin fell below 85K yesterday, the first time since November last year, reaching a low of 83,383 USD, with a 24-hour drop of 5.51%. Other digital assets saw even larger declines, with ETH, DOGE, and SOL all falling more than 6%. Over $1 billion in leveraged positions were forced to liquidate.

This plunge continues the ongoing slump in cryptocurrencies since early October. Despite recent gains in tech stocks and precious metals like gold and silver over the past few weeks, Bitcoin's price has remained stagnant. Currently, Bitcoin's price is down more than 30% from its all-time high of 126,199 USD set in early

October.Ergonia Business Development Director Chris Newhouse stated:

"Today's weakness highlights the ongoing role of cryptocurrencies as leveraged betas for traditional risk assets. As stocks (especially tech stocks) continue to face pressure, the digital market has amplified the overall risk-off sentiment. Liquidations of leveraged positions have exacerbated the decline, with over-leveraged long positions being sold off, adding selling pressure to an already fragile market."

Microsoft Drops 10%, Yen Carry Trade Unwinding Intensifies Bitcoin's Decline

Microsoft fell nearly 10%, its worst single-day drop since March 2020, exerting significant pressure on the entire software industry.

According to CNBC reports, the Senate failed to advance a procedural vote on a government funding bill on Thursday. If the bill isn't passed before the weekend, the U.S. government could shut down again.

The unwinding of popular strategies like yen carry trades in traditional markets has also intensified this pressure. The USD/JPY exchange rate has fallen from near 160 in the middle of the month to above 152, as traders have exited the market recently due to fears of intervention by the Bank of Japan (BOJ). The performance of cryptocurrencies like Bitcoin is often closely tied to liquidity. When liquidity is abundant, cryptocurrency prices rise; when liquidity is tight, prices fall.

Disclaimer: None of the information contained here constitutes an offer (or solicitation of an offer) to buy or sell any currency, product or financial instrument, to make any investment, or to participate in any particular trading strategy.