Bitcoin suddenly experiences a "Sunday heavy decline": the liquidation wave and market logic behind the 5% flash crash

On Christmas Day, according to Gate market data, Bitcoin’s price was reported at $87,836.6, a slight increase of 1.01% within 24 hours.

On October 11, Bitcoin plummeted nearly 5% within just three hours without any major news catalysts, rapidly dropping from around $91,500 to a low of $86,950.

This flash crash, dubbed the “Sunday slam,” triggered a chain reaction: in the past 24 hours, the total cryptocurrency liquidation across the network reached $309 million, of which $267 million were long positions, affecting over 91,000 traders.

01 Market Overview: Christmas Day Calm and Sunday Storm

On Christmas Day, Gate market data shows Bitcoin’s price temporarily stabilized around $87,836.6, with a 24-hour increase of 1.01%.

Rewinding to the Sunday (October 11) when the crash occurred, the market experienced a thrilling three hours. Bitcoin suddenly fell from the weekend trading level of around $91,500, briefly dropping on Gate to $86,950, a decline of nearly 5%.

Such unanticipated flash crashes are not uncommon in the crypto market. As analysts point out: “As seen countless times this year, significant volatility often occurs on Friday and Sunday nights.”

02 Data Perspective: Liquidation Wave Sweeps Through Crypto Market

The price crash on Sunday directly triggered massive forced liquidations. On October 11, the total liquidation amount across the network reached $309 million.

Long positions dominated the liquidations, totaling $267 million, while short position liquidations amounted to $42.34 million. This means nearly 90% of liquidation trades involved bullish bets.

In terms of individual assets, Bitcoin long liquidations reached $101 million, short liquidations $13.49 million; Ethereum long liquidations were $66.67 million, short liquidations $8.35 million.

The largest single liquidation occurred on the Hyperliquid exchange, where a BTC-USD position was forcibly closed, valued at $7.92 million.

03 In-Depth Analysis: Three Major Factors Behind Bitcoin’s Plunge

This sudden “Sunday heavy drop” was not caused by a single factor but resulted from multiple market forces working together.

Market sentiment was extremely fragile, which was the primary factor. Before the flash crash, the crypto fear and greed index had fallen to 24, in the “extreme fear” zone. This market psychology laid the groundwork for sharp price fluctuations.

The large-scale expiration of derivatives options intensified market tension. Data shows that on Friday, Bitcoin and Ethereum options worth $28.5 billion are set to expire on Deribit, accounting for more than half of the exchange’s open interest.

Lack of liquidity amplified price volatility. During weekend trading hours, market liquidity is usually thinner, and any sudden selling pressure can be magnified, triggering a chain reaction of liquidations.

04 Market Perspective: Bull-Bear Battle and Future Trends

Market analysts are divided on this flash crash. Some see it as a necessary part of structural adjustment, while others view it as short-term volatility.

CoinDesk attributes the crash to “a sudden surge in selling volume, which caused a domino effect of forced selling, and historic leveraged position liquidations further exacerbated this sell-off.”

Some analysts remain optimistic. They believe that Sunday’s decline actually cleared excessive leverage from the market, laying a foundation for healthy upward movement. “Downward liquidity was first drained, which is exactly what we want to see,” said analyst Sykodelic.

From a technical perspective, $88,000 has become a key support level for Bitcoin, while $90,000 presents a recent resistance. As long as the price holds above support, the overall market structure can still be considered constructive.

Long-term fundamental indicators also show positive signals. Over the past two days, more than 41,000 Bitcoin have been moved out of exchanges, easing selling pressure. Ethereum exchange reserves have also fallen to multi-year lows, at only 16.2 million coins.

05 Historical Comparison: Similar Scripts with Different Plays

This “Sunday heavy drop” resembles several flash crashes in crypto market history but also unfolds within a unique market environment.

Looking back to October 2025, the crypto market liquidated over $3 billion within 60 minutes. The situation was similar: a sharp price decline triggered over-leveraged positions to be forcibly closed, amplifying downward pressure.

Compared to the brutal bear market of November 2018, when Bitcoin dropped 36.57%, the current decline is relatively moderate. However, it’s worth noting that in November 2025, Bitcoin fell 17.49%, making it the worst November performance since 2018.

These historical events reveal a common pattern: after large-scale liquidations, markets often experience short-term rebounds as forced positions are absorbed and new buyers enter.

Gate market data shows that as of December 25, Bitcoin’s price fluctuated between $87,514.2 and $87,961.0. The wounds from Sunday’s crash are slowly healing.

Market analysts are closely watching the $88,000 key support level. One market observer pointed out that over 41,000 Bitcoin are flowing from exchanges into long-term holder wallets, with exchange reserves at multi-year lows.

Meanwhile, options contracts worth $28.5 billion are set to expire this Friday, casting a huge shadow over the market. The extreme fear index remains at a low of 24, indicating that market sentiment remains fragile.