Crypto Liquidations Hit $1.15 Billion As Bitcoin Slips

Bitcoin closed below its 50-week moving average after holding it for seven consecutive weeks. This break weakens the scenario of a sustainable recovery, but the billion-dollar long liquidations blur the signal. Part of the decline results from forced deleveraging rather than voluntary selling.

The threshold confirming the recovery has just broken

Bitcoin ended the week around 74,968 dollars, about 0.7% below its 50-week moving average, located near 75,488 dollars. It had reclaimed this threshold on September 20 before recording seven consecutive weekly closes above it.

This average corresponds to the mean price of the last fifty weekly closes. It does not mechanically predict BTC’s evolution but helps assess if the recent trend still outweighs the losses accumulated during the bear market.

Three benchmarks now measure the strength of the recovery :

• The 50-week average, near 75,500 dollars ;
• The average cost of recent holders, around 75,691 dollars ;
• The 200-day moving average, located near 73,150 dollars.

Bitcoin is therefore trading below the first two thresholds but still close to the third. This setup means investors who bought are gradually going into loss, while the long-term trend is not yet clearly broken.

The proximity between the 50-week average and the acquisition cost of short-term holders, however, strengthens resistance between 75,500 and 76,000 dollars. A return to this zone may encourage some recent buyers to sell as soon as they regain their entry price.

Crypto liquidations accelerated the break

The weekly close occurred amid a particularly significant wave of liquidations. In twenty-four hours, about 1.15 billion dollars of crypto positions were automatically closed, including 1.04 billion of bullish bets.

More than 167,000 traders were liquidated. Positions on Ether accounted for over 500 million dollars, against around 309 million for bitcoin. The largest individual liquidation involved a bullish bet of 48.2 million dollars on ETH at Binance.

These forced closures amplify the decline. When a leveraged position no longer has sufficient collateral, the platform automatically sells it, regardless of the trader’s conviction. An initial drop then triggers further sales, which can cause new liquidations.

Available figures remain incomplete. Some platforms, including Binance and OKX, release their data in partial episodes. The actual amount of destroyed positions could therefore exceed published estimates.

This purge does not make the break of the 50-week moving average insignificant. However, it prevents interpreting it as sufficient proof of a bear market return. Part of the move corresponds to eliminating excess leverage accumulated by bullish investors.

Pressure does not come only from derivatives. US spot Bitcoin ETFs suffered 1.28 billion dollars of net withdrawals the previous week. Their annual balance has thus become negative, with 914.1 million dollars in outflows since January. The absence of institutional spot purchases reduces the market’s capacity to absorb crypto liquidations.

Next month will tell if the break was temporary

Bitcoin’s history does not give a uniform verdict after such a break. During the 2011-2012 and 2019-2020 recoveries, BTC also fell back below its 50-week moving average after reclaiming it.

In the first case, it spent twenty more weeks below this level and dropped up to 35% below it. In the second, it lost the average five times, notably during the pandemic shock. However, the previous cycle low held in both situations.

Alex Thorn, head of research at Galaxy, thus calls for caution with historical comparisons. His sample includes only five comparable reclaimings, and a market bottom can only be confirmed in hindsight.

For Galaxy, the bullish scenario would remain defensible if bitcoin returns above the 50-week moving average within about a month. A quick recovery would show that the current close mainly resulted from liquidations and a temporary risk aversion episode.

Conversely, several closes below 75,500 dollars, accompanied by new crypto ETF withdrawals, would turn this line into resistance. The market would then watch the 200-day average around 73,150 dollars, then the 69,000 to 70,000 dollar zone.

The most important signal will therefore not be this week’s isolated break, but the time spent below the threshold. Bitcoin has not yet invalidated its June floor near 59,500 dollars. However, it has just lost the technical level that allowed presenting this floor as definitively acquired.