Sharp volatility hit the crypto market on Friday after Bitcoin briefly plunged on Hyperliquid. The sudden drop triggered millions in liquidations and sharply raised investor anxiety. Prices bounced back quickly, but market data indicate that conditions remain fragile and pessimism is deepening among traders.
In brief
- •Bitcoin’s rapid dip to $80,255 on Hyperliquid added stress to a market already seeing over $2B in liquidations.
- •Shallow liquidity and stretched longs amplified the downturn as volatility picked up across major exchanges.
- •Retail traders drove the pullback through heavy Bitcoin and Ether ETF selling, according to JPMorgan.
- •Sentiment index from 10x Research fell below 5, signaling extreme fear and suggesting a potential tactical rebound.
Sudden Drop Clears $2B in Positions as Liquidity Thins Across Markets
Bitcoin fell from $83,307 to $80,255 in under a minute on Hyperliquid before rebounding to around $83,000. During the drop, five accounts were liquidated, each with roughly $10 million in exposure. The largest single liquidation reached $36.78 million, according to BlockPulse. Other major exchanges saw milder declines, with lows holding above $81,000.
On-chain data showed a sharp rise in forced selling as prices slipped below $82,000. Analysts say the move reflects stretched long positions and thin liquidity around recent highs. The broader trend remains bullish, but clusters of leveraged positions continue to collapse during rapid swings.
Data highlights several pressure points across the market:
- •Heavy long exposure built near short-term peaks.
- •Shallow order books during the decline.
- •Rapid unwinding of high-leverage positions.
- •Forced selling across derivatives platforms.
- •Rising volatility as confidence weakened.
At the time of writing, the OG crypto is exchanging hands at $83,959 after touching a low of $80,880 on Friday. The slide toward $82,000 wiped out more than $2 billion in positions over the past 24 hours and occurred alongside record ETF outflows of $903 million. Analysts link part of the stress to uncertainty surrounding Federal Reserve policy and widespread de-risking.
JPMorgan Flags Retail-Driven Downturn as Bitcoin Sentiment Falls Below 5
JPMorgan analysts report that retail traders—not institutions—are driving the current pullback. Heavy selling in Bitcoin and Ether ETFs by smaller investors has added to the downturn. Strategists now identify $84,000 and $73,000 as key levels of pressure. Traders are weighing whether to buy the dip or wait for more clarity.
Sentiment data from 10x Research shows traders moving into extreme fear. The firm’s Greed & Fear Index has dropped below 5—its lowest reading on record. Readings under 10% often appear during periods of capitulation. The 21-day average of the index has also fallen to 10%, a level that has previously marked short-term lows.
Markus Thielen of 10x Research warned that deep pessimism does not guarantee a quick recovery. Earlier this year, the index bottomed even as prices continued to fall for several weeks. Still, Bitcoin recorded an initial 10% rebound after that sentiment low. With fear now approaching similar levels, a short-term bounce is possible. Even so, traders should expect continued volatility.