Bitcoin’s retreat from record highs triggered a $500 million liquidation event, with prices down 1.2% in 24 hours and 3% from Monday’s peak. Ethereum dropped 4.6% to $4,492. Over $635 million in leveraged crypto positions closed, $489 million in longs. Analysts attribute the sell-off to profit-taking and macroeconomic factors like a stronger dollar.

Chief analyst Ryan Lee sees the drop as a healthy correction. He predicts another 3-4% decline before stabilizing and attempting a breakout above $126,000. Bullish momentum could push Bitcoin to $132,000-$135,000, contingent on market sentiment and ETF inflows. Myriad predicts a 57% chance of Bitcoin reaching $140,000.

Despite short-term pressure, long-term drivers for Bitcoin remain intact. Analysts cite a “debasement trade” driven by fiscal deficits and a search for assets immune to government mismanagement, supporting the bullish case for crypto. Austin King expects Q4 to be exciting for the industry, as investors turn to Bitcoin as a hedge against global instability.

Read more at Yahoo Finance: Over $489M in Crypto Longs Liquidated as Bitcoin, Ethereum Extend Losses