Bitcoin’s 5% Flash Crash Leads to $165 Million in Leveraged Liquidations

A sudden 5% drop in the price of Bitcoin on Tuesday caused traders with leveraged exposure to Bitcoin and other cryptocurrencies to lose more than $165 million in less than 2 hours.

In the early hours of March 2, UTC, Bitcoin plunged 5% from $69,450 to $65,970 in less than 30 minutes, according to TradingView data.

On April 2, Bitcoin suddenly plunged by more than 5%. Source: TradingView

According to Coinglass data, Bitcoin’s sharp drop resulted in the elimination of more than $165 million in leveraged positions, of which Bitcoin longs amounted to just over $50 million, with Ethereum longs accounting for the majority of that.

Around $6 million in Dogecoin long positions and $4 million in Solana long positions were liquidated, lagging behind BTC and ETH.

Bitcoin's sudden drop led to $165 million in leveraged liquidations. Source: CoinGlass

Around the same time, bitcoin exchange-traded funds (ETFs) saw net outflows of $86 million, breaking a streak of four consecutive days of positive inflows, according to FarSide data.

BlackRock's ETF was the best-performing fund with $165.9 million in net inflows, while Fidelity was second with $44 million.

However, inflows were dragged down by $302 million of outflows from Grayscale’s GBTC, bringing daily net outflows across all funds to $85.7 million.

USDT briefly decoupled

As Bitcoin crashed, the value of USDT also fell. According to data from Coingecko and Google Finance, the dollar-pegged stablecoin Tether also fluctuated by about 1%, briefly falling from its $1 peg to $0.988.

Tether experienced brief volatility on some price tracking sites. Source: Coingecko

It’s unclear whether USDT’s volatility was a bug in some data trackers’ APIs or if the currency’s value suddenly dropped — however, the brief decoupling did not show up on other price trackers.