Bitcoin fell as much as 2.4% on Wednesday to approximately $83,600, slipping below the $84,000 level as about $550 million in leveraged crypto positions were liquidated over 24 hours, according to CoinGlass data.
Liquidations occur when exchanges automatically close positions held by traders using borrowed funds who can no longer cover mounting losses. The majority of Wednesday's liquidations affected long positions, meaning traders betting on price increases.
Other major cryptocurrencies also declined. Ether dropped nearly 4% to around $2,590, XRP lost about 4%, and Solana fell more than 3%.
Dan Khus, chief analyst at LVRG Research, characterized the decline as "a leverage flush instead of a downward trend," according to Bloomberg reporting.
The drop pushed bitcoin below $84,000, a technical level that FxPro had identified on Tuesday as a point where sellers typically take control. The recent low near $83,000 represents the next key level.
The cryptocurrency decline occurred alongside broader market weakness. Renewed Iranian attacks in the Strait of Hormuz raised concerns about shipping disruptions and pushed Brent crude above $101 a barrel. The 10-year Treasury yield climbed back above 5.3%, and Europe's Stoxx 600 index snapped a three-day winning streak. U.S. stock futures remained little changed after the S&P 500 closed at a record high.
Rachael Lucas, an analyst at BTC Markets, told Bloomberg that a hawkish reading from the Federal Reserve's meeting minutes, due later Wednesday, could push Treasury yields and the dollar higher while maintaining pressure on risk assets.
