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(Bloomberg) -- Souring Bitcoin sentiment has triggered almost $1.5 billion in crypto liquidations over the past 24 hours, as the largest digital asset sank back to a two-month low.
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This forced deleveraging — the automatic, mandatory closure of high-risk trades by crypto exchanges — is the largest volume seen since February, according to data compiled by CoinGlass. Almost $800 million positions in Bitcoin were wiped out.
Bitcoin slipped as much as 7% to below $67,000 on Tuesday for the first time since April as lingering concern about the conflict in Iran and selling by major holder Strategy Inc. continued to dent investor appetite. The price of the token is down almost 50% from an all-time high of around $126,000 reached in October.
The slide comes as a revival of the artificial-intelligence trade kept fueling Wall Street momentum, with stocks also rising on hopes for an agreement that would end the war that has roiled financial markets around the world.
Bitcoin faces additional headwinds as two of the traditionally biggest sources of demand — exchange-traded funds and Michael Saylor’s Strategy — have suddenly become a drag on the price.
“The selloff feels triggered by Strategy’s disclosure that it sold 32 BTC,” wrote Jasper De Maere, OTC trader at Wintermute. “However, reality is that even without this headline, momentum was fading and institutional participation we saw on the OTC desk was grinding back to the lows.”
Strategy on Monday disclosed its first sale of the token since late 2022, disposing of about $2.5 million of its roughly $59 billion stockpile. The move marked a symbolic break from the maximalist playbook that helped make Strategy one of Bitcoin’s largest buyers.
Shares of Strategy tumbled as much as 10%, the biggest one-day decline since February. The stock is down more than 60% in the past year.
While the sale is negligible relative to Strategy’s Bitcoin position, it arrives at a sensitive moment for the market. US ETFs tied to Bitcoin have suffered net outflows for a record 11 straight days, with investors yanking almost $3.5 billion over that stretch, data compiled by Bloomberg show.
As a result, the cushioning effect of progress made on US legislation to oversee crypto markets has been “overwhelmed” by risk-off sentiment on Iran, according James Butterfill, head of research at CoinShares.
“A confirmed daily or weekly close below $70,000 would mark a structural shift rather than a headline reaction,” said Sean McNulty, Asia-Pacific derivatives trading lead at FalconX.
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