The dramatic shake-up that Bitcoin experienced this week has led the market to witness the largest long liquidation event since the start of the bull cycle.
Specifically, on April 6, more than 7,500 BTC worth of long positions, valued at over $500 million, were liquidated across major exchanges. This single-day liquidation event marked a significant blow to traders who had bet on Bitcoin’s continued rise.
Largest Cycle Long Liquidation in Bitcoin
According to Darkfost, an analyst at CryptoQuant, this event marked the most severe single-day long liquidation since the bull rally of this cycle began in 2023.
The chart accompanying the update suggests that similar long liquidations have occurred over the past two years, but the most recent one, which took place on Monday, set a new record.
Notably, the wave of forced selling coincided with a sharp drop in Bitcoin’s price on the spot market. It plummeted from $83,000 to a low of $74,000 before briefly stabilizing in the $77,000 range. Since then, the market has shown limited recovery, with Bitcoin still hovering around the $77,000 range.
Analyst Darkfost attributed the sudden move to growing apprehension around Donald Trump’s economic policies, particularly new tariff enforcement, which stirred broader market volatility. The U.S. stock market has not been spared.
Reports highlight a multi-trillion-dollar loss for the stock market for nearly consecutive trading days this month. One report even suggested that the U.S. stock market has lost $10 trillion since Trump became president, just three months into his term.
Time to Preserve Your Capital
Given the brutal condition of the financial market, Darkfost reminded market participants of the risks of trading in volatile markets, especially for those holding leveraged positions.
Furthermore, Darkfost emphasized the significance of preserving capital during uncertain times, warning crypto traders to avoid excessive risk exposure or leveraged trades.
What’s Next for Bitcoin?
Some market observers believe the bearish trend could persist for the next 12 months, with ongoing global economic uncertainty adding further fuel to the fire. Among the bearish commentators is Ki Young Ju, founder of CryptoQuant.
In his latest commentary, he noted that uncertainty drives safe-haven demand, which is evident as gold has risen 11% since Trump’s comeback, while Bitcoin has dropped 25%. He stated that this reinforces the idea that Bitcoin is not yet “digital gold.”
However, on a more positive note, he expressed confidence that Bitcoin will eventually claim a share of gold’s $20 trillion market cap.
Too many tariff experts on X playing 6D chess.
Uncertainty fuels safe-haven demand. Gold is up 11% since Trump’s comeback, #Bitcoin down 25%.
Bad news: BTC isn’t digital gold yet.
Good news: It’ll eat gold’s $20T cap. It’s just $1.5T now.— Ki Young Ju (@ki_young_ju) April 9, 2025
Read the full article here