Crypto Market Faces Heavy Liquidations as Bitcoin Drops Below $27K

After briefly surpassing $27,000, Bitcoin (BTC) experienced a rapid decline of about 2% within minutes during the early afternoon hours in the United States, settling at $26,700.

Earlier on Monday, Bitcoin had reached heights of $27,420, marking its highest price point since late August.

Despite this drop, BTC still maintained a 0.8% increase over the past 24 hours. However, it lagged behind the broader market as reflected in the 1.1% rise of the Bitsday Market Index (BMI).

Solana's SOL, Litecoin's LTC, and Bitcoin Cash (BCH) notably outperformed, seeing gains of 3% to 4%, even though they retraced some of their initial surges. Meanwhile, Chainlink's native token, LINK, saw an impressive surge of nearly 8% due to new collaborations with traditional financial institutions.

The sharp fluctuations in prices caught some crypto derivatives traders by surprise, resulting in the liquidation of approximately $100 million worth of leveraged trading positions in the past 24 hours, as reported by Coinglass data. Short traders, who were aiming to profit from declining prices, incurred losses amounting to $60 million, while long
traders, who had bet on rising prices, faced losses of $40 million.