Bitcoin Rollercoaster: Nearly a Million Wiped Out in 24 Hours

·

Bitcoin’s Volatile Surge and Crash Sparks Mass Liquidations

In early February 2025, Bitcoin once again proved its reputation as the ultimate financial rollercoaster. On February 3, the leading cryptocurrency plunged dramatically, dropping as low as $91,000—a 6.83% decline within 24 hours. This sharp correction sent shockwaves across the digital asset market, triggering widespread panic and over **730,000 investor positions being liquidated** in just one day, with losses exceeding **$2.2 billion**, according to Coinglass data.

However, by February 4, Bitcoin rebounded strongly, reclaiming the symbolic $100,000 mark and peaking at $102,000. At the time of reporting—February 4, 5:31 PM—the price stabilized around $98,511, showing a 2.72% gain for the day and a 2.73% increase over the past 24 hours, despite a weekly decline of 3.36%.

👉 Discover how top traders navigate extreme volatility like this.

Market Drivers Behind the Swing

The turbulence was largely fueled by geopolitical tensions and macroeconomic sentiment. Former U.S. President Donald Trump announced new import tariffs—25% on goods from Canada and Mexico, and 10% on Chinese imports—sparking fears of a global trade war and economic stagnation. As risk-off sentiment surged, investors rushed to divest from volatile assets, with Bitcoin among the first to feel the pressure.

In leveraged crypto markets, such sell-offs can spiral quickly. When prices drop sharply, margin calls trigger automatic liquidations, amplifying downward momentum. This creates a self-reinforcing cycle: falling prices → forced selling → further declines → more liquidations.

Yet, by the next trading session, optimism returned. Analysts suggest that easing concerns over immediate tariff escalations helped restore confidence. The rebound wasn’t limited to Bitcoin; altcoins also staged a powerful recovery.

Altcoins Join the Rebound

While Bitcoin grabbed headlines, other major cryptocurrencies saw impressive gains:

Interestingly, Trump-themed tokens (TRUMP) continued to fall, underscoring the distinction between meme-driven assets and broader market trends.

This synchronized bounce highlights how sentiment shifts can rapidly reshape the entire crypto landscape—even after severe drawdowns.

Why Is Bitcoin So Volatile?

Several interlocking factors contribute to Bitcoin’s wild swings:

1. Macroeconomic Policy Shifts

Federal Reserve interest rate expectations play a critical role. With inflation still above target, expectations of prolonged high interest rates reduce liquidity in risk assets. As economist Pan Helin noted, tighter monetary conditions squeeze speculative investments like crypto.

2. Leverage Amplifies Risk

Crypto exchanges often allow leverage of up to 100x. While this magnifies potential profits, it also makes positions extremely fragile during volatility. A small adverse move can wipe out entire accounts—especially when thousands use similar strategies.

3. Speculative Momentum Cycles

Pan Helin explained that much of the recent rally was driven by so-called “Trump trade” speculation—anticipating pro-crypto policies under a potential administration change. When reality didn’t match hype, the correction followed swiftly.

“Bitcoin has clear bubble characteristics,” Pan said. “But this bubble may keep inflating because the game of musical chairs isn’t over yet.”

He argues that the final phase of any speculative bubble involves mass retail participation—the “greater fool” who buys at the top. So far, that wave hasn’t fully materialized.

4. Regulatory Uncertainty

Despite growing institutional adoption, regulatory clarity remains inconsistent globally. News of crackdowns or endorsements from major economies can swing markets overnight.

The Human Cost: Over 900K Liquidated

The human toll behind the numbers is staggering:

That’s nearly one million traders suffering margin calls within two days.

👉 Learn how to protect your portfolio from sudden market shocks.

These figures reflect not just poor risk management but also the emotional toll of trading in high-leverage environments. Fear and greed dominate decision-making—especially among inexperienced investors chasing quick returns.

What This Means for Investors

The recent chaos underscores several crucial lessons:

As Pan Helin warned: “The party isn’t over until the music stops—and retail investors usually arrive just before it does.”

Core Keywords Identified

For SEO optimization and search visibility, key terms naturally integrated throughout include:

These terms align with common user queries related to market movements, risk education, and real-time crypto analysis.

Frequently Asked Questions (FAQ)

Q: What caused Bitcoin’s sudden drop on February 3?
A: The decline was triggered by former President Trump’s announcement of new tariffs on Canada, Mexico, and China, which sparked fears of a trade war and broader economic instability—leading investors to flee risk assets.

Q: Why did so many people get liquidated?
A: High leverage usage amplified losses. When Bitcoin dropped rapidly, margin calls triggered automatic sell-offs, wiping out undercollateralized positions across major exchanges.

Q: How can I avoid being liquidated in volatile markets?
A: Reduce leverage, set stop-loss orders, diversify holdings, and never invest more than you can afford to lose. Using risk management tools is critical in crypto trading.

Q: Is the recent rebound sustainable?
A: While short-term sentiment improved, long-term sustainability depends on macroeconomic conditions, regulatory developments, and whether institutional inflows continue.

Q: Are altcoins safer than Bitcoin?
A: No—altcoins are typically more volatile than Bitcoin. They often experience larger percentage swings during market moves and carry additional project-specific risks.

Q: Should I buy during a crash or wait?
A: Timing the market is extremely difficult. Dollar-cost averaging (DCA) into positions over time reduces exposure to single-point volatility and is recommended for most investors.

👉 Start building a smarter crypto strategy today—see how professionals manage risk.

Final Thoughts: Proceed with Caution

Bitcoin’s latest rollercoaster ride is a stark reminder: this market rewards patience and punishes impulsivity. While opportunities abound in digital assets, they come hand-in-hand with extreme volatility and complex risks.

Investors must look beyond price charts and understand the underlying forces—macro trends, leverage dynamics, regulatory shifts, and behavioral psychology—that drive these movements.

As history shows, every bubble eventually bursts. The question isn’t if—but when, and whether you’ll be holding the bag.

Stay informed. Stay cautious. And above all—trade responsibly.