Global cryptocurrency market crash; Bitcoin, Altcoins plunge and billions wiped out

KATHMANDU: The global cryptocurrency market suffered a sharp crash this week, wiping out hundreds of billions in value as Bitcoin and major altcoins saw steep price declines amid forced liquidations, increased risk-off sentiment, and broader financial market stress. This downturn has significantly impacted investors, traders, and digital-asset ecosystems worldwide.

According to real-time market data, Bitcoin — the largest digital asset — plunged sharply, trading near multi-week lows at around $81,000–$86,000, erasing roughly $140 billion in market capitalization in a single session. Other leading tokens such as Ethereum and Solana also posted steep losses, contributing to a broad sell-off.

Massive Liquidations and Market Volatility

The crash triggered widespread liquidations, with both retail and leveraged positions being forcibly closed across major trading platforms. Analysts report that over $1.7 billion in crypto positions were liquidated in a matter of hours, amplifying downward pressure on prices and driving panic selling among traders.

Margin calls and forced sell orders accelerated losses as Bitcoin broke below critical psychological support levels, prompting algorithmic trading systems to dump holdings to cover risk exposures. This cascade effect pushed markets deeper into red territory and heightened volatility across the entire digital-asset space.

Broad Sell-Off Across Assets

The price slide was not limited to Bitcoin. Altcoins experienced proportionally larger declines, with several tokens dropping more than 8 percent as investor confidence deteriorated. The total crypto market cap — which had exceeded $3 trillion — fell sharply as sell-offs intensified.

Market sentiment indicators have plunged into “fear” territory, reflecting growing caution and risk aversion among participants. Analysts caution that this could signal conditions for further volatility in the near term.

Root Causes: Forced Selling and Risk Sentiment

Industry experts attribute the crash to a convergence of factors:

Leverage unwind: Heavy use of margin and derivatives amplified selling pressure as prices moved lower.

Risk-off sentiment: Broader financial markets exhibited risk aversion, drawing capital away from high-risk assets such as cryptocurrencies.

Liquidity conditions: Thin trading conditions over recent sessions exacerbated price swings, allowing relatively small sell orders to have outsized impacts.

Investor Impact and Future Outlook

The sudden downturn has shaken confidence among individual and institutional investors. Many traders faced significant losses, especially those holding leveraged positions, while others are reassessing exposure to digital assets amid heightened risk. Analysts warn that a prolonged correction or extended bear phase could unfold if selling pressure remains unchecked, particularly with macroeconomic uncertainties hanging over global markets.

Market participants are now closely watching whether Bitcoin can stabilize above key support levels and whether broader crypto sentiment can recover in the coming weeks.