Daily Market Update: Stocks Fall and Bitcoin Crashes to $81K Triggering $1.7 Billion Crypto Wipeout

TLDR

• Bitcoin fell to $81,000 triggering $1.68 billion in crypto liquidations with long positions accounting for 93% of losses
• Stock futures declined 0.5-0.7% as investors await Trump’s Friday announcement for new Fed chair pick
• Microsoft stock plunged 10% on cloud growth concerns while Apple gained 1% after beating earnings expectations
• Hyperliquid exchange saw $598 million in liquidations while Bitcoin accounted for $780 million and Ethereum $414 million
• Traders expect two quarter-point Fed rate cuts by year-end as major oil companies prepare Friday earnings reports

Cryptocurrency markets experienced a severe downturn as Bitcoin’s price drop to $81,000 sparked massive liquidations across trading platforms. The 24-hour period saw more than $1.68 billion in leveraged positions forcibly closed.

Approximately 267,370 traders were pushed out of their positions during the selloff. Long positions represented $1.56 billion of the total liquidations, showing how traders were positioned for price increases.

Short positions made up just $118 million of the closures. This imbalance reveals the one-sided nature of market positioning before the downturn.

Bitcoin liquidations alone reached $780 million during this timeframe. Ethereum followed with over $414 million in forced position closures.

The single largest liquidation was an $80.57 million Bitcoin-USDT trade on HTX exchange. This highlights the risks of using excessive leverage even on liquid trading pairs.

Crypto Exchanges Record Heavy Liquidation Activity

Hyperliquid exchange topped liquidation totals with $598 million in forced closures. More than 94% of these positions were long bets on rising prices.

Bybit processed $339 million in liquidations over the same period. Binance recorded $181 million with long exposure dominating all three exchanges.

Liquidations occur when leveraged traders cannot maintain margin requirements on borrowed funds. Exchanges automatically close these positions to limit losses.

This creates a domino effect in volatile markets as forced selling pushes prices lower. Additional positions then hit liquidation levels, accelerating the downward pressure.

Market analysts attribute the selloff to overleveraged positions unwinding rather than fresh negative news. Heavy long liquidations often signal the removal of speculative excess from markets.

Stock Futures Drop as Fed Chair Decision Looms

US stock futures retreated as investors awaited President Trump’s announcement of his Federal Reserve chair nominee. The president confirmed he will reveal his selection Friday morning.

S&P 500 futures fell approximately 0.6% in early trading sessions. Nasdaq 100 futures declined 0.7% while Dow Jones futures dropped around 0.5%.

Former Fed Governor Kevin Warsh leads the candidate list for the position. Other potential nominees include Fed governor Chris Waller, BlackRock’s Rick Rieder, and Kevin Hassett.

Trump’s announcement follows the current Fed’s decision to hold interest rates steady this week. Market participants anticipate roughly two quarter-point rate reductions before 2026 ends.

Tech Stocks Show Mixed Results on Earnings

Apple stock climbed about 1% after surpassing fiscal first-quarter profit and revenue projections. The company benefited from stronger-than-expected iPhone sales during the period.

Microsoft shares tumbled roughly 10% Thursday, marking their sharpest single-day drop since March 2020. The decline followed indications of slower expansion in the company’s cloud computing division.

The Microsoft selloff dragged down both S&P 500 and Nasdaq indexes heavily. Investors continue weighing artificial intelligence revenue potential against the substantial spending requirements.

Sandisk shares jumped 11% after the data storage company issued optimistic future guidance. Despite recent market swings, major indexes remain higher for the week overall.

Exxon and Chevron will release earnings before Friday’s opening bell. American Express and Verizon complete this week’s corporate earnings schedule.

The post Daily Market Update: Stocks Fall and Bitcoin Crashes to $81K Triggering $1.7 Billion Crypto Wipeout appeared first on Blockonomi.