Crypto Liquidations Hit Almost $700M Over 24 Hours As Bitcoin Dips Sharply

Crypto market liquidations over the last 24 hours have reached nearly $700 million after the top-ranking cryptocurrency, Bitcoin (BTC), dropped below its key support level of $100,000.

Coinglass data shows that $699.68 million worth of crypto positions have been liquidated from nearly 255,450 traders. The worst hit among them are the long position holders, losing about $653.42 million in the past 24 hours.

Bitcoin led the market sell-off, with long liquidations exceeding $236 million in the past 24 hours. The top cryptocurrency shed over 7% of its market value, plunging to a low of $97,250 (data from Bitstamp) on Jan. 27.

This drop echoes the market downturn on Jan. 20, when Bitcoin experienced a similar one-day decline, eventually bottoming out at $100,087 by Jan. 21.

Ethereum (ETH), Solana (SOL), and Dogecoin (DOGE) tailed Bitcoin’s spot losses and liquidations. Overall, the crypto market has dropped by about 7.60% in the last 24 hours.

China’s DeepSeek AI Behind the Crypto Market Drop

Bitcoin and the broader crypto market started crashing just after CME Bitcoin Futures opened for the week, which, in turn, took its cues from the tech-heavy Nasdaq 100 index declines.

U.S. futures dipped amid growing concerns that a new artificial intelligence model from China’s DeepSeek could disrupt the tech industry.

DeepSeek recently unveiled an upgraded AI model that it claims rivals OpenAI’s technology.

Over the weekend, buzz intensified around reports suggesting the model’s cost efficiency and ability to operate on lower-capability chips. These reports raise potential challenges to the dominance of U.S. tech giants like Nvidia Corp.

The decline is accelerating:

Nasdaq 100 futures are now down -330 POINTS since the market opened just hours ago as DeepSeek takes #1 on the App Store.

This is how you know DeepSeek has become a major threat to US large cap tech.

The stock market does not lie.

(a thread) pic.twitter.com/NLwK1oytaz

— The Kobeissi Letter (@KobeissiLetter) January 27, 2025

The fear of diminishing returns or overvaluation in the tech sector could lead to a more cautious approach to high-risk investments like cryptocurrencies.

This market sentiment, driven by the possibility of a shift in AI technology leadership, likely contributed to the crypto market’s decline as traders reassessed their portfolios in light of these new technological developments.

Bitcoin Open Interest Indicates Minimal Panic in Crypto Market

The sharp drop in Bitcoin’s price, which resulted in $236 million in long liquidations, suggests that many traders used high leverage.

When prices move against their positions, especially in a volatile market, even a small price movement can lead to large liquidations if leverage is high. This indicates the price drop squeezed considerable speculative long positioning in the market.

However, Bitcoin’s open interest (OI), which reflects the number of unsettled futures positions, has remained stable in the past 24 hours, recording a modest drop from $65.63 billion on Jan. 26 to $65.14 billion on Jan. 27.

Bitcoin’s stable OI implies that while there were liquidations, new positions were also opened at roughly the same pace.

In other words, market participants are still actively trading, and some may enter new long or short positions to take advantage of the price movement or hedge other positions.

This indicates ongoing interest in Bitcoin despite the price drop. In addition, Bitcoin’s funding rates are positive, suggesting that long traders pay short traders a fee every eight hours to keep their positions open. This further suggests the market’s overall bullish bias.

That is primarily due to Donald Trump’s US presidency, which will likely see him establishing a strategic national reserve focused on Bitcoin.

Bitcoin Technical Outlook Amid DeepSeek FUD

Bitcoin’s ongoing correction appears to be part of its prior consolidation trend, which is occurring inside what appears to be a bull flag pattern.

Of course, the cryptocurrency has formed two local tops, which could lead to fears of a double-top bearish reversal pattern. However, one cannot ignore the formation of at least three local bottoms, which point to a bullish reversal otherwise.

Therefore, relying on rangebound trading appears wiser than betting on broader breakouts until further confirmation. In other words, one can see a pullback from the flag’s upper trendline (~$107,500) as a sign of a larger retreat toward the lower trendline at around $91,650.

Conversely, a decisive rebound from the lower trendline could mean a retest of the upper trendline target.

BTC/USD Breakout Setups To Watch

On breakouts, a high-volume breakdown below the lower trendline risks triggers the double top scenario. Typically, this technical pattern resolves when the price drops by as much as the pattern’s maximum height (between the peak and the neckline support, which in this case is the flag’s lower trendline).

That theoretically puts BTC’s max pain target at around $79,000.

On the other hand, a breakout above the upper trendline could confirm the bull flag’s bullish continuation pattern. This would set the upside target at a level equal to the height of the previous uptrend, measured from the breakout point.

Simply put, BTC can soar toward $150,000 if the bull flag patterns plays out as intended, especially as Trump FOMO overtakes DeepSeek FUD in the coming weeks.