What happened?
Bitcoin experienced a sharp sell-off that wiped out over $12 billion in open interest as a wave of forced liquidations hit the market. The plunge was driven by macro headlines — including threats of heavy tariffs on China — and blew out over $20 billion in leveraged positions. Markets then quickly rebounded to around $115,000 as on-chain indicators showed broad deleveraging and normalization.
Who does this affect?
Leveraged traders and derivatives desks took the biggest hit as margin calls and liquidations forced positions to close. Retail traders reacted strongly too, with roughly $1.36 billion deposited to Binance in a single day, while U.S. spot ETFs saw minimal outflows and continued weekly inflows. Exchanges, market makers, and investors in correlated assets (stocks, gold, oil) also felt the swing in risk sentiment.
Why does this matter?
This reset matters because it clears excess leverage, lowering the chance of a more disorderly collapse in the short term. With leverage reduced, liquidity indicators healthier, and ETFs still drawing money, the market could be set up to test prior highs like $126k–$130k if key levels are reclaimed. But macro headlines — renewed trade tensions or surprise policy moves — can still spark big moves, so volatility and headline risk remain high for traders and investors.