Bitcoin Drops 2.8% as $650M Crypto Bets Liquidated

For finance and markets professionals, the crypto selloff is less about blockchain and more about a leverage flush rippling through risk assets. With Brent crude above $100 and the 10-year Treasury yield climbing past 5.3%, the $650 million liquidation cascade signals how quickly crowded trades unwind when the macro backdrop shifts.

Digital-asset markets suffered a sharp bout of forced selling on Wednesday, October 7, 2026, as a wave of liquidations swept across crypto venues. Bitcoin, the largest token, fell as much as 2.8% to $83,248, while Ether slumped 5.3% to $2,555. Smaller assets followed, with XRP and Solana each down more than 4%. Shares of crypto-linked companies also retreated: Coinbase Global dropped as much as 3.7% and Strategy slipped 4.5%. According to data compiled by Coinglass, roughly $650 million in crypto positions were liquidated over the preceding 24 hours, a figure that underscores the scale of the unwind. Bloomberg's earlier headline on Wednesday put the liquidation tally at $550 million, while Business Times later cited Coinglass data showing roughly $650 million, reflecting the fast-moving nature of the derivatives unwinding. The upward revision itself signals that forced selling accelerated as prices fell.

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Bitcoin, the largest token, fell as much as 2.8% to $83,248, while Ether slumped 5.3% to $2,555.

The selloff did not occur in isolation. Broader market jitters weighed on risk appetite after renewed Iranian attacks in the Strait of Hormuz tempered hopes that shipping through the key waterway would return to pre-war levels. Brent crude crossed above $100 a barrel, raising fresh concerns about energy-driven inflation. US stocks edged lower after the S&P 500 closed at an all-time high in the prior session, while Europe's Stoxx 600 snapped a three-day run of gains. A recovery in bonds also lost steam, with the 10-year Treasury yield climbing above 5.3 per cent. The liquidation spike underscores the heavily leveraged structure of crypto markets, where perpetual futures and margin trading amplify moves in both directions. The fact that most liquidations were long positions suggests traders had piled into upside bets expecting a continuation of the recovery from summer lows. When those bets were abruptly unwound, the selling pressure fed on itself, dragging spot prices lower and hitting crypto-linked equities in tandem.

Dan Khus, chief analyst at LVRG Research, characterized the pullback as a 'leverage flush instead of a downward trend,' noting that most liquidations came from long positions. That distinction matters: a leverage flush tends to be a sharp but potentially short-lived purge of crowded bets, rather than a fundamental change in the asset's trend. Still, the magnitude of $650 million in 24 hours illustrates how quickly positioning can unravel when collateral calls cascade through derivatives venues.

Traders are now focused on the release of Federal Reserve meeting minutes later Wednesday. Rachael Lucas, an analyst at BTC Markets, said a 'hawkish read could lift yields and the US dollar, keeping pressure on risk assets.' With the 10-year Treasury yield already above 5.3%, any signal that the Fed is inclined to keep rates higher for longer would likely extend the pain for crypto and other duration-sensitive assets. The backdrop of rising oil prices complicates the inflation picture, potentially reinforcing hawkishness.