bitcoin
Bitcoin's decline triggered $555.6 million in cryptocurrency liquidations over a 24-hour period. AFP

Bitcoin dropped below $84,000 on Wednesday as a sharp crypto market pullback forced hundreds of millions of dollars in leveraged positions to close, with traders betting on higher prices taking most of the losses.

Bitcoin fell as low as about $82,880 after trading as high as roughly $86,700.

The decline triggered $555.6 million in cryptocurrency liquidations over a 24-hour period, according to CoinGlass. Long positions accounted for $487.2 million of the total, meaning traders who had used leverage to bet on rising prices absorbed most of the forced closures.

Liquidations occur when an exchange automatically closes a leveraged position after losses reduce a trader's available collateral below the level required to keep the position open.

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Bitcoin was not the only major cryptocurrency to decline. Ether fell to around $2,550 during the selloff, while other large digital assets also moved lower. The drop followed a strong period for Bitcoin, which had gained roughly 40% during the third quarter.

Funding rates are recurring payments between traders in perpetual futures markets and can provide an indication of whether leveraged positioning is tilted toward bullish or bearish bets. Open interest measures the value of outstanding derivatives contracts that have not yet been closed.

The Crypto Fear & Greed Index stood at 62, classified as "greed," after falling from 67 a day earlier, according to data cited by The Block.

The sharp move also came after several newly created wallets opened highly leveraged short positions on Hyperliquid before Bitcoin's decline.

Onchain analytics account Lookonchain said four wallets funded with a combined 1 million USDC opened 40-times leveraged short positions totaling 148.49 Bitcoin, worth about $12.5 million at the time.

Public Hyperliquid data showed the positions were opened Tuesday evening at average entry prices around $85,500. The wallet activity does not by itself establish a connection to the subsequent market decline.