Bitcoin’s rapid drop was driven by a late-night liquidity hunt and forced liquidations, with Bitcoin falling ~3.3% and Ethereum ~9.3% as $1.7B in crypto longs were wiped out; determining recovery hinges on U.S. session flows and whether BTC holds the $112.9k VWAP level.
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Liquidity hunt triggered mass liquidations during low U.S. hours
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Bitcoin fell 3.31% to $111.8k; Ethereum dropped 9.34% in the past 12 hours.
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Market-wide liquidations totaled $1.7 billion, with $1.62 billion in long positions removed.
Bitcoin price drop: liquidity hunt and $1.7B liquidations drove the sell-off — monitor VWAP $112.9k and U.S. session for recovery. Read more on COINOTAG.
What caused the Bitcoin price drop?
Bitcoin price drop occurred primarily because of a liquidity hunt during low U.S. session hours that triggered forced liquidations, removing roughly $1.7 billion across the market. This created a rapid price cascade that pushed BTC from ~$115.6k to $111.8k and intensified selling in ETH and altcoins.
How large were the liquidations and which assets were hit hardest?
Market trackers reported $1.7 billion in 24‑hour liquidations, with approximately $1.62 billion in long positions erased. Bitcoin fell ~3.31% and Ethereum plunged ~9.34% in the same 12-hour window. Coinalyze and CoinGlass data (mentioned as plain text sources) show Open Interest for BTC and ETH fell by roughly 4.86% and 9.6% respectively.
Has the crypto market begun to stabilize?
Short-term stabilization is unclear. Technicals on the 1‑hour Bitcoin chart indicated a bearish structure and a break below $114.7k, while VWAP analysis highlighted $112.9k as a key support. If BTC holds $112.9k, the bias becomes moderately bullish; a reclaim of $116.1k would confirm recovery momentum.
Source: Axel Adler Jr Insights
Analyst Axel Adler Jr highlighted the $112.9k VWAP as a pivotal level. Futures pressure eased, with aggressive leverage not dominant at the time of analysis, suggesting the move lower was largely a liquidity search rather than sustained directional conviction.
How should traders monitor the next moves?
Traders should focus on: 1) whether BTC remains above the $112.9k VWAP, 2) whether the U.S. session brings renewed buying, and 3) changes in Open Interest and liquidation heatmaps. A sustained hold above $112.9k points to stabilization; failure could expose the magnetic $105.5k–$109k liquidity zone.
Comparative snapshot
| Asset | 12‑hour move | 24‑hr Open Interest change | Notable liquidation zones |
|---|---|---|---|
| Bitcoin (BTC) | -3.31% (to $111.8k) | -4.86% | $105.5k‑$109k, VWAP $112.9k |
| Ethereum (ETH) | -9.34% | -9.6% | $4.2k dense liquidation band |
Source: BTC/USDT on TradingView
Source: Coinglass
The liquidation heatmap shows magnetic zones that could attract further selling if selling pressure resumes. Traders should not assume a drop to these pockets is inevitable — markets often reverse before collecting maximum liquidity.
Source: CoinGlass
Ethereum showed a dense liquidation cluster around $4.2k that had already been taken out, increasing the likelihood of a short-term reversal if buyers step in during the U.S. session. COINOTAG and other market commentators flagged similar dynamics in recent coverage.
Frequently Asked Questions
Why did Bitcoin and the crypto market fall so quickly?
Low liquidity during U.S. off-hours created an environment for a liquidity hunt, resulting in a cascade of forced long liquidations and rapid price declines across BTC and ETH.
Can the crypto market recover later this week?
Yes — recovery depends on order flow during the New York open, BTC holding the $112.9k VWAP, and whether Open Interest stabilizes as buyers absorb selling pressure.
Key Takeaways
- Liquidity hunt: Low overnight liquidity produced a rapid sell-off and liquidation cascade.
- Critical levels: $112.9k VWAP and $116.1k swing high are immediate levels to watch for BTC.
- Monitor U.S. session: The New York trading session will likely determine if the market stabilizes or resumes selling.
Conclusion
Bitcoin’s recent drop was a liquidity-driven event amplified by leverage and mass liquidations, with $112.9k VWAP now the key pivot. Track BTC’s ability to hold that level, watch Open Interest and liquidation heatmaps, and monitor the U.S. session for signs of absorption or renewed selling. Reported data referenced: CoinGlass, Coinalyze, Axel Adler Jr, The Kobeissi Letter, TradingView, and COINOTAG — all mentioned as sources without external links. Published by COINOTAG on 2025-09-22.
