Hundreds of thousands of cryptocurrency traders have been liquidated as the global crypto market capitalization plunged to its five-month lows amid fears of a bear market.
Major financial markets, including crypto assets, have been registering consecutive losses as the fears of the US recession surface.
The global crypto market cap declined by 11% in the past 24 hours to $2.37 trillion, according to data from CoinMarketCap. The last time that the digital asset market value hovered below $2.4 trillion was in early November 2024, before the end of the US presidential elections.
However, the total crypto trading volume tripled over the last day to $130 billion.
The movement suggests that traders are rushing to the markets to either profit from the market-wide panic or close trading positions to offset losses.
CMC data shows that the market has re-entered the “extreme fear” zone.
The market-wide bear storm triggered over $1.37 billion in liquidations over the past 24 hours, according to data from CoinGlass. Most of the wiped-out trading positions, worth $1.2 billion, are longs and the remaining $150 million are shorts.
Bitcoin BTC $78 799 24h volatility: 1.2% Market cap: $1.57 T Vol. 24h: $101.00 B alone recorded $467 million in liquidations – $401 million longs and $66 million shorts.
In total more than 450,000 traders have been liquidated. The largest single liquidation order happened on Bitfinex and was worth $16.3 million in Bitcoin.
Bears and Recession
The crypto market is showing signs of a potential bear market before triggering another bull run. One of the main reasons is the lack of a major bullish catalyst other than short-term hype.
CryptoQuant CEO Ki Young Ju wrote in an X post that the “Bitcoin bull cycle is over”.
#Bitcoin bull cycle is over — here’s why.
There’s a concept in on-chain data called Realized Cap. It works like this: when BTC enters a blockchain wallet, it’s considered a “buy,” and when it leaves, it’s treated as a “sell.” Using this idea, we can estimate an average cost… pic.twitter.com/xDHRin8N1K
— Ki Young Ju (@ki_young_ju) April 5, 2025
He claimed that Bitcoin (BTC) price has been struggling to move upward due to the extreme selling pressure. Consequently, even a small selloff could push the price lower due to insufficient demand for accumulation.
Young Ju says that the selling pressure could end soon, but the bear market would be expected to last at least six months before another market-wide rally.
The fear of a US recession has been acting as a major catalyst for the bear market. According to a Reuters report, Goldman Sachs expects a 45% chance of an economic decline in the United States over the next 12 months.
This is due to the economic and policy uncertainty with President Donald Trump’s reciprocal tariffs and the retaliatory measures taken by the US trade partners.
The Volatility Index (VIX) developed by the Chicago Board Options Exchange rose to a five-year high of 45.3. This level was last seen in April 2020.
Major stocks like the S&P 500 and the Dow Jones Industrial Average declined by 5.97% and 5.5%, respectively.
On the other hand, BitMEX co-founder Arthur Hayes believes that US trade tariffs could potentially help cryptocurrencies rise again despite the short-term bloodbath. Hayes added that the reciprocal tariffs would likely lead to a weaker US dollar that would ultimately push Bitcoin higher.
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