Bitcoin (BTC) plummeted over 3% at the onset of Asian trading hours, reflecting the broader market upheaval and waning risk appetite for cryptocurrencies. This sharp descent from $65,500 to nearly $64,000 within minutes during Tokyo’s trading session led to the liquidation of over $250 million in bullish positions, marking the most significant liquidation event since early July.

Market Turmoil and Liquidation Frenzy

Liquidations ensue when exchanges forcibly terminate a trader’s leveraged position due to partial or total depletion of the initial margin. This data is crucial for market participants as it signals the purging of excessive leverage from popular futures products, indicating a short-term reduction in price volatility. The broad-based CoinDesk 20 (CD20), an index tracking the largest tokens by capitalization excluding stablecoins, declined by 3.3%.

Ether’s Plunge and Exchange Liquidations

Ether (ETH) longs suffered the most, with $100 million liquidated following a 7.5% drop, driven by outflows from the newly introduced ETH ETF. Binance experienced the highest liquidations among exchanges, totaling $118 million, with 88% of those being long positions. OKX and Huobi, favored by Asia-based traders, saw up to 94% of long trades liquidated on their platforms.

Impact of U.S. Tech Stock Decline

The cryptocurrency sell-off coincided with a substantial hit to U.S. technology stocks on Wednesday, as the tech-centric Nasdaq 100 index plunged 660 points, its steepest drop since 2022. Mixed quarterly earnings from Alphabet (GOOG) and Tesla (TSLA) exacerbated the situation, with shares of these firms dropping as much as 12% on Wednesday. Collectively, the “Magnificent 7” tech stocks shed over $750 billion in market capitalization, the largest single-day loss on record for the group.

Ripple Effects in Asian Markets

The losses extended into Asian markets early Thursday, with Japan’s Nikkei 225 index slumping over 3% amid speculations that the Bank of Japan might increase interest rates. This confluence of factors underscores the interconnectedness of global financial markets and the cascading effects of significant movements in major indices on the cryptocurrency sector.