Crypto Market Sees $480 Million Liquidated Amid Spike in US Treasury Yield

Over the past 24 hours, more than 157,000 traders faced liquidations, with a total value of over $480 million. 

According to Coinglass data, approximately $400 million in leveraged crypto positions were wiped out. Consequently, Bitcoin’s price dropped over 5% following seven consecutive days of gains.

Sudden Crypto Liquidations Trigger a Market Pullback

The broader crypto market saw its market cap fall by 7%, with Ethereum declining nearly 8%. The largest single liquidation occurred on Binance.

Crypto Market 24-Hour Liquidation Heatmap. Source: Coinglass

The liquidations coincided with a sudden rise in the 10-year US Treasury yield. Data from the Institute for Supply Management revealed stronger-than-expected growth in the US services sector during December. 

This intensified concerns about persistent inflation. Higher yields often pressure growth-oriented risk assets, including cryptocurrencies.

A Sudden Spike in 10-year US Treasury Yield on January 7. Source: CNBC

Also, open interest levels also contributed to the wave of liquidations. Since yesterday, both Bitcoin and Ethereum have lost over $1 billion in open interest, signaling significant deleveraging in the market.

“BTC About $1.6 billion in Open Interest wiped out since the local high yesterday. ETH also saw about $1 billion in Open Interest get rinsed out on this move. Going to be interesting seeing how this plays out in the short term. Overall market still remains choppy which is usually the case near the end and start of the year,” popular trader and influencer Daan posted on X (formerly Twitter). 

Some analysts are pointing to today’s crypto liquidation as an indicator that Bitcoin’s price will fall below its $93,000 support level and enter a bearish cycle. 

“Bitcoin is repeating its 8-year resistance pattern. Every rejection at this trendline has led to massive crashes. Expect a big crash, History’s repeating. My 2025 #BTC targets are below $30,000,” Jacob King wrote on X (formerly Twitter).

However, most analysts maintain a bullish outlook for Bitcoin. For instance, Rekt Capital predicts that liquidations mark the start of a new four-year cycle. 

According to its projection, a parabolic price increase may occur before the anticipated 2026 bear market.

Economic Data and Federal Reserve Policy Impact

US labor market data also potentially contributed to today’s market volatility. The JOLTs Job Openings report revealed 8.098 million vacancies in November. This exceeds the 7.70 million forecast. 

A strong labor market could prompt the Federal Reserve to maintain higher interest rates longer than expected. This means more pressure on risk assets like cryptocurrencies.

The Federal Reserve recently signaled a third rate cut but hinted at fewer reductions in 2025. Historically, rate cuts have benefited Bitcoin prices, while rate hikes have had the opposite effect.

Meanwhile, today’s market liquidations impacted crypto-related stocks. MicroStrategy’s stock (MSTR) dropped 10%, reflecting the broader market downturn. 

MSTR Stock Price Daily Chart. Source: Google Finance

The company has been aggressively purchasing Bitcoin throughout 2024, even making its first BTC purchase of 2025 yesterday. Marathon Digital Holdings (MARA), the largest Bitcoin miner, also saw its stock price fall by 5%.

However, not all assets have been affected by today’s downturn. Despite the widespread crypto liquidations, the Bitget token (BGB) defied the trend. The altcoin gained over 4% today bringing its January rally to more than 10%.