Bitcoin Flash Crash Wipes Out $128 Million in Long Positions as Price Briefly Dips Below $90,000

Core Insights - Bitcoin experienced a flash crash, briefly dropping below $90,000, which led to the liquidation of approximately $128 million in long positions, highlighting the volatility in the cryptocurrency market [1][3][2] Group 1: Price Movement and Liquidations - Bitcoin's price dipped to an intra-day low of $89,641 before rebounding above $90,000, indicating significant market volatility [1] - The liquidation of long positions amounted to roughly $128 million, showcasing the risks associated with leveraged trading in a tight trading range [3][2] Group 2: ETF Outflows - There were significant outflows from US spot Bitcoin ETFs, with net redemptions reaching $486 million on Wednesday, marking the largest single-day outflow since November 20 [4] - Prior to this, ETF fund flows had already turned negative, with $243 million exiting on Tuesday, contrasting sharply with the $697 million in positive flows recorded on Monday [5] Group 3: Market Dynamics and Analyst Perspectives - Analysts suggest that Bitcoin's price is mechanically suppressed due to dealer hedging, which has confined it within a $90K–$95K range, establishing $90K as support and $100K as resistance [6] - Expectations for future price movements are influenced by expiring options later in the month, with potential for an earlier breakout if institutional demand returns [7] - Market liquidity has shifted, with capital inflows into Bitcoin drying up, leading to a more diverse liquidity channel, which may prevent significant price crashes like those seen in past bear markets [8][9]