Bitcoin investors liquidated $2.56 billion in recent days, according to data provider CoinGlass, as cryptocurrencies slumped following a sell-off in other risk assets, including equities and precious metals.
The wipeouts in both short and long bitcoin positions are far below the record $19 billion in crypto liquidations the market experienced after U.S. President Donald Trump announced new tariffs on China.
Even so, analysts say the fresh cascade of wipeouts demonstrates how sensitive the crypto market has become to risk-off sentiment.
While bitcoin is notoriously volatile, cryptocurrencies have been weighed down by fresh concerns about the AI trade and a sell-off in precious metals sparked by Trump's announcement that he was picking Kevin Warsh as his Fed chair nominee.
"What we've seen the last few months is probably people taking a step back while they have to reassess their risk frameworks and how they operate in this market," said Adam McCarthy, a senior research analyst at digital market data provider Kaiko.
Bitcoin fell as low as $104,782.88 during the October 10-11 period, after setting a fresh record high just days earlier above $126,000.
It has yet to regain those peaks, and was last trading at around $78,396, after falling more than 6% on Saturday. Thin weekend liquidity also exacerbated downward moves over the weekend, Bitfinex analysts said in a Monday research report.
"The biggest risk to prices at these levels have been outside forces — whether including a sharp rise in unemployment or deterioration of the AI trade," said Jim Ferraioli, director of crypto research and strategy at Charles Schwab's Schwab Center for Financial Research.
Markets encountered a barrage of news last week that weighed heavily on investor sentiment, including disappointing Microsoft earnings that raised concerns about AI spending.
Microsoft on Wednesday reported revenue growth in its Azure cloud-computing business that was only slightly above expectations, sending shares down 10% the following day.
Markets also expect Warsh to lead a shift toward rate cuts alongside tighter balance-sheet policy, which is seen as leaning more hawkish.
That announcement sparked a sharp sell-off in gold and silver prices on Friday, with silver recording its worst day ever and gold notching its steepest daily fall since 1983.
"Investors were looking for an excuse to lighten up and they finally got several," said David Morrison, senior market analyst at Trade Nation.
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