Quick overview

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Bitcoin (BTC) has undergone a severe flash crash, falling as low as $81.8K in recent hours amid high market volatility. Over $2 billion in leveraged positions throughout the cryptocurrency ecosystem have been wiped out in the last 24 hours alone, representing a roughly 7-8 percent single-day decline from levels around $88,000–$90,000.

The event is similar to the high-stakes deleveraging waves that were observed earlier in November 2025, but it is notable for its size and speed. It mainly targets long (bullish) bets on Bitcoin and Ethereum (ETH). Let’s dissect it using the most recent information and background.

BTC experienced its steepest intraday decline since April 2025 lows, falling below $81,000 over the course of two to four hours. As of November 21, 2025 (UTC), it had momentarily tested the $78,000 support level before slightly rising to hover around $81,500–$82,000.

Altcoins like XRP dropped below $2, and ETH followed suit, plummeting to about $2,700. Trump’s tariffs, which imposed a 10 percent charge on all imports and up to 54 percent on Chinese goods, have reignited trade tensions between the US and China, leading to a risk-averse withdrawal from Bitcoin.

The release of strong jobs data and the Federal Reserve’s reluctance to cut interest rates in December dashed hopes for a more lenient monetary policy, turning optimism into fear. In October, open interest in Bitcoin futures reached $94 billion but subsequently fell by 43%. Stop-loss orders were clustered in the $81,000 to $90,000 range as traders took on leverage of 20x to 100x.

Automated selling cascades eroded liquidity, with exchange depth dropping to only 5% of typical levels in response to a 2% decline. This led to a $19 billion wipeout on October 10, reflecting a self-reinforcing cycle where margin calls on long positions triggered additional sell-offs that drove down prices further.

According to CFGI, the “extreme fear” index for cryptocurrency hit cycle lows, with Bitcoin erasing all of its 2025 gains and dropping 30% from its peak of $126,000.

Institutional ETF outflows rose to $278 million on November 12, exacerbating the situation and revealing persistent faith in FTX in contrast to earlier inflows of $524 million.