{"id":11284,"date":"2025-02-04T14:46:46","date_gmt":"2025-02-04T14:46:46","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=11284"},"modified":"2025-02-04T14:46:46","modified_gmt":"2025-02-04T14:46:46","slug":"the-bitcoin-drop-to-91500-triggered-a-major-defi-flushout","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=11284","title":{"rendered":"The Bitcoin Drop To $91,500 Triggered a Major DeFi Flushout"},"content":{"rendered":"<div>\n<p>The Bitcoin price drop to $91,500 triggered mass crypto liquidations across exchanges and top DeFi protocols like Aave and Compound \u2013 let\u2019s late a look.<\/p>\n<p><span data-preserver-spaces=\"true\">After peaking at around $106,000 on Friday, Bitcoin <\/p>\n<style>\n    .cwp-coin-chart svg path {\n        stroke-width: 0.65 !important;\n    }<\/p>\n<\/style>\n<p>    <span class=\"cwp-coin-widget-container\" data-id=\"btc-bitcoin\" id=\"coin_widget_id_67a2277e49219\"><\/p>\n<p>        <!-- name of the coin in the text --><br \/>\n        <span class=\"cwp-coin-widget-wrapper\" data-id=\"btc-bitcoin\"><br \/>\n            <span class=\"cwp-coin-widget-holder \" style=\"background:#dbeaff;\"><br \/>\n                <span class=\"cwp-coin-name\" data-id=\"btc-bitcoin\"><br \/>\n                    <span class=\"cwp-coin-icon \"><\/span><br \/>\n                    <span class=\"cwp-coin-label \"><\/span><br \/>\n                    <span class=\"cwp-coin-symbol hidden\"><\/span><\/p>\n<p>                    <span class=\"cwp-coin-trend-holder\"><br \/>\n                        <span class=\"cwp-coin-price hidden\"><\/span><br \/>\n                    <\/span><br \/>\n                    <span class=\"cwp-coin-trend-holder\"><br \/>\n                        <span class=\"cwp-coin-trend \"><\/span><br \/>\n                    <\/span><\/p>\n<p>                <\/span><br \/>\n            <\/span><br \/>\n        <\/span><\/p>\n<p>        <!-- popup with basic info about the coin --><br \/>\n        <span class=\"cwp-coin-popup-wrapper \" data-id=\"btc-bitcoin\" style=\"\"><br \/>\n            <span class=\"cwp-coin-popup-holder\"><br \/>\n                <span class=\"cwp-coin-name\"><br \/>\n                    <span class=\"cwp-coin-icon\"><\/span><br \/>\n                    <span class=\"cwp-coin-popup-name\"><\/span><br \/>\n                    <span class=\"cwp-coin-popup-symbol\"><\/span><br \/>\n                <\/span><br \/>\n                <span class=\"cwp-coin-price\"><br \/>\n                    <span class=\"cwp-coin-price-title\">Price<\/span><br \/>\n                    <span class=\"cwp-coin-price-holder\"><br \/>\n                        <span class=\"cwp-coin-price-value\"><\/span><br \/>\n                        <span class=\"cwp-coin-trend-holder\"><br \/>\n                            <span class=\"cwp-coin-trend\"><\/span><br \/>\n                        <\/span><br \/>\n                    <\/span><br \/>\n                <\/span><br \/>\n                <span class=\"cwp-coin-volume\"><br \/>\n                    <span class=\"cwp-coin-price-holder\"><br \/>\n                        <span class=\"cwp-coin-volume-title\">Volume in 24h<\/span><\/p>\n<p>                    <\/span><br \/>\n                    <span class=\"cwp-coin-volume-value\"><\/span><br \/>\n                    <!-- <span class=\"cwp-coin-trend-holder\">\n                        <span class=\"cwp-coin-trend\">?<\/span> \n                    <\/span>                     --><br \/>\n                <\/span><br \/>\n                <span class=\"cwp-coin-chart\"><br \/>\n                    <span class=\"cwp-graph-title\">Price 7d<\/span><br \/>\n                    <span class=\"cwp-graph-container\"><\/span><br \/>\n                <\/span><\/p>\n<p>            <\/span>           <\/p>\n<p>        <\/span><br \/>\n    <\/span><\/p>\n<p> dropped throughout the NY session of that day before extending losses over the weekend. With claims of possible market manipulation by leading market makers, Bitcoin fell some more on Monday, dropping to as low as $91,500.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">However, the unexpected plunge in the earlier hours of February 3 was contained as prices recovered steadily, breaking $101,000 before recoiling to spot rates. Amid this wavy price action, billions of leveraged long positions were liquidated on Binance, OKX, and Bybit.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">It is now emerging that leveraged longs and 100X speculators were not the only culprits. According to <a class=\"general-link\" href=\"https:\/\/insights.santiment.net\/read\/liquidations-galore-wake-up-traders-from-their-snore-8443?fpr=twitter\" target=\"_blank\" rel=\"noopener nofollow\">Santiment<\/a>, the fallout extended beyond trading to lending, where Aave, Compound, and other DeFi protocols had to sell collateral to protect lenders. Their decision shook DeFi to the core, sparking a sell-off in top pro-DeFi platforms like Aave, <a class=\"general-link\" title=\"Will Injective Crypto Recover From Trade War and DeepSeek AI Chaos?\" href=\"https:\/\/99bitcoins.com\/news\/will-injective-crypto-recover-from-trade-war-and-deepseek-ai-chaos\/\" target=\"_blank\" rel=\"noopener\">Injective<\/a>, and even Compound.<\/span><\/p>\n<h2><strong><span data-preserver-spaces=\"true\">The Bitcoin Price Crash Saw More Than $2.2Bn Vanquished in Mass Liquidation Event<\/span><\/strong><\/h2>\n<p><span data-preserver-spaces=\"true\">From the BTCUSDT chart, the drop from January 31 to February 3 saw BTC lose 10%, pushing losses from all-time highs to around 16%. Although prices are stable at the time of writing, the coin remains below $100,000.<\/span><\/p>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone size-full\" src=\"https:\/\/www.tradingview.com\/x\/54RDg2Pz\/\" width=\"1499\" height=\"859\"><\/p>\n<p>(<a class=\"general-link\" href=\"https:\/\/www.tradingview.com\/symbols\/BTCUSDT\/\" target=\"_blank\" rel=\"noopener nofollow\">BTCUSDT<\/a>)<\/p>\n<p><span data-preserver-spaces=\"true\">Over the last three days, the see-sawing, range-bound market has led to liquidations in the perpetual futures markets.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">According to Coinglass, over $481 million worth of leveraged positions have been closed in the last 24 hours. Most of these were leveraged longs, betting on Bitcoin and Ethereum to rally.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-200783\" src=\"https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/02\/Screenshot-2025-02-04T142355.820.png\" alt=\"\" width=\"1548\" height=\"509\" srcset=\"https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/02\/Screenshot-2025-02-04T142355.820.png 1548w, https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/02\/Screenshot-2025-02-04T142355.820-300x99.png 300w, https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/02\/Screenshot-2025-02-04T142355.820-1024x337.png 1024w, https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/02\/Screenshot-2025-02-04T142355.820-768x253.png 768w, https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/02\/Screenshot-2025-02-04T142355.820-1536x505.png 1536w, https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/02\/Screenshot-2025-02-04T142355.820-50x16.png 50w\" sizes=\"auto, (max-width: 1548px) 100vw, 1548px\"><\/p>\n<p>(<a class=\"general-link\" href=\"https:\/\/www.coinglass.com\/LiquidationData\" target=\"_blank\" rel=\"noopener nofollow\">Source<\/a>)<\/p>\n<p><span data-preserver-spaces=\"true\">As of February 3, this figure stood at over $2.2 billion, meaning many speculators have been flushed out, erasing excess leverage.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The same liquidation was extended to DeFi lending protocols like Aave and Compound. On these platforms, users can borrow loans, using wBTC, ETH, or any other supported asset as collateral.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">To borrow, one must deposit a larger collateral than the loan amount. For example, to get a $1,000 loan in USDT, collateral of $1,500 or higher must be locked to cover volatility.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">It is a form of leverage because provided prices keep rising, the borrower need not worry about liquidation. Only once prices begin cooling off can the borrower consider repaying the loan lest the protocol liquidate the collateral.<\/span><\/p>\n<h2><strong><span data-preserver-spaces=\"true\">wBTC Liquidations on Aave and Compound DeFi\u00a0<\/span><\/strong><\/h2>\n<p><span data-preserver-spaces=\"true\">This is what precisely happened on February 3 when prices tanked across the board. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Users who had taken loans locking in wBTC, a stablecoin tracking BTC prices, lost their assets on Aave and Compound after the protocol automatically liquidated these coins.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">According to Santiment, over $782,000 worth of wBTC were liquidated on Aave v2, the highest since August 1, 2024.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">On Aave v3, which is known for its enhanced risk management and risk capabilities, over $23.7 million of wBTC were sold\u2013the highest liquidation day ever.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone\" src=\"https:\/\/pbs.twimg.com\/media\/Gi7KGLsXsAAeQye?format=jpg&amp;name=4096x4096\" alt=\"The Bitcoin price drop to $91,500 triggered mass crypto liquidations across exchanges and top DeFi protocols like Aave and Compound\" width=\"3487\" height=\"1656\"><\/p>\n<p>(<a class=\"general-link\" href=\"https:\/\/insights.santiment.net\/read\/liquidations-galore-wake-up-traders-from-their-snore-8443?fpr=twitter\" target=\"_blank\" rel=\"noopener nofollow\">Source<\/a>)<\/p>\n<p><span data-preserver-spaces=\"true\">Meanwhile, borrowers on Compound weren\u2019t spared. When prices crashed to $91,500, over $467,000 of wBTC were forcefully closed. On Compound v3, more than $18.5 million worth of wBTC collateral had to be sold to protect lenders and stabilize the protocol.<\/span><\/p>\n<p><img decoding=\"async\" src=\"https:\/\/pbs.twimg.com\/media\/Gi7KIFpWgAAcEKr?format=jpg&amp;name=4096x4096\" alt=\"Image\"><\/p>\n<p>(<a class=\"general-link\" href=\"https:\/\/insights.santiment.net\/read\/liquidations-galore-wake-up-traders-from-their-snore-8443?fpr=twitter\" target=\"_blank\" rel=\"noopener nofollow\">Source<\/a>)<\/p>\n<p><span data-preserver-spaces=\"true\">As sanity resumes after the deleveraging event, the total value locked (TVL) of Aave and Compound stands at $16.8 billion and $2.3 billion, respectively, according to DeFiLlama.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-200780\" src=\"https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/02\/Screenshot-2025-02-04T142232.618.png\" alt=\"\" width=\"1606\" height=\"787\" srcset=\"https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/02\/Screenshot-2025-02-04T142232.618.png 1606w, https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/02\/Screenshot-2025-02-04T142232.618-300x147.png 300w, https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/02\/Screenshot-2025-02-04T142232.618-1024x502.png 1024w, https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/02\/Screenshot-2025-02-04T142232.618-768x376.png 768w, https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/02\/Screenshot-2025-02-04T142232.618-130x63.png 130w, https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/02\/Screenshot-2025-02-04T142232.618-104x50.png 104w, https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/02\/Screenshot-2025-02-04T142232.618-83x40.png 83w, https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/02\/Screenshot-2025-02-04T142232.618-1536x753.png 1536w, https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/02\/Screenshot-2025-02-04T142232.618-50x25.png 50w\" sizes=\"auto, (max-width: 1606px) 100vw, 1606px\"><\/p>\n<p>(<a class=\"general-link\" href=\"https:\/\/defillama.com\/chain\/Ethereum\" target=\"_blank\" rel=\"noopener nofollow\">Source<\/a>)<\/p>\n<p><span data-preserver-spaces=\"true\">On average, assets under management have shrunk by nearly 8% over the last week.<\/span><\/p>\n<p><strong><span data-preserver-spaces=\"true\">EXPLORE:\u00a0<a class=\"general-link\" href=\"https:\/\/99bitcoins.com\/news\/ftx-victims-despair-as-parents-call-on-president-will-trump-free-sam-bankman-fried\/\" target=\"_blank\" rel=\"noopener\">FTX Victims Despair As Parents Call on President: Will Trump Free Sam Bankman-Fried?<\/a><br \/>\n<\/span><\/strong><\/p>\n<p><strong><a class=\"general-link\" href=\"https:\/\/discord.gg\/B7Uk6agkqj\" target=\"_blank\" rel=\"nofollow noopener nofollow nofollow nofollow nofollow nofollow nofollow nofollow nofollow nofollow nofollow nofollow nofollow nofollow nofollow\">Join The 99Bitcoins News Discord Here For The Latest Market Updates<\/a><\/strong><\/p>\n<p>The post <a href=\"https:\/\/99bitcoins.com\/news\/the-bitcoin-drop-to-91500-triggered-a-major-defi-flushout\/\">The Bitcoin Drop To $91,500 Triggered a Major DeFi Flushout<\/a> appeared first on <a href=\"https:\/\/99bitcoins.com\/\">99Bitcoins<\/a>.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Bitcoin price drop to $91,500 triggered mass crypto liquidations across exchanges and top DeFi protocols like Aave and Compound \u2013 let\u2019s late a look. After peaking at around $106,000 on Friday, Bitcoin Price Volume in 24h Price 7d dropped throughout the NY session of that day before extending losses over the weekend. With claims [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-11284","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/11284","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11284"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/11284\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11284"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11284"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11284"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}