Traders lost $1 billion during the volatility breakout.

Bitcoin (BTC) has seen high volatility in the last 24 hours, which has shaken the crypto market. The flash crash resulted in more than $1 billion in outflows, one of the biggest sell-offs seen since the FTX 2022 crash.

Coinglass data shows that nearly $900 million worth of Bitcoin positions were liquidated as the price dropped from $100,000 to $90,000 before rebounding to $97,000.

Bitcoin marked the largest multi-year liquidity event

This spectacular liquidity crisis affected more than 156,000 traders worldwide, with $816.819 million longs and $279.631 shorts underwater. According to Coinglass, the largest single liquidation of around $19 million occurred on the OKX exchange.

Analysts are drawing parallels with the FTX crisis. McKenna, a prominent figure in the crypto community, says this is the most important liquidity event since the FTX loss. Many other community members supported this view.

“Spot buyers are coming in now, they're riding the liquid waterfall,” McKenna said.

Adding to the chaos, Web3 analytics tool Lookonchain highlighted that Gox had moved 3,620 BTC worth $352.69 million to two new wallets. The transaction took place hours after Bitcoin's price broke the $100,000 milestone, with $2.43 billion in Bitcoin transferred to anonymous wallets.

Speculation that the US government may have taken down Bitcoin during this period further fueled market uncertainty.

“Did the US government hit the sell button on the BTC they sent to Coinbase?” exclaimed one user.

Despite these transactions, several factors led to massive outflows. BeInCrypto identified profitability, large sales orders at key milestones, and excess positions as significant contributors. Many traders rely on borrowed funds to bet on Bitcoin's continued rise and are exposed when the price falls.

Wallwire financial analyst Jacob King criticized excessive retail investors for opening long positions at all-time highs.

“This is what happens when retail investors succumb to FOMO and open positions at all-time highs as the whales release their holdings,” King wrote.

Whales Capitalize on Bitcoin Dip

Despite the chaos, some big investors saw an opportunity. Blockchain analytics firm Lookonchain reported that a whale bought 600 BTC worth $58.85 million during the Great Depression. This two-week total brought $127 million to 1,300 BTC. This convenient purchase shows the attractiveness of Bitcoin even in the midst of turbulence.

“After BTC dropped below $100,000, a whale took the opportunity to buy 600 BTC worth $58.85 million! In the past 2 weeks, this whale has accumulated a total of 1,300 BTC worth $127 million,” reports Lookonchain.

Despite the liquidation process, some analysts see this event as an important correction in Bitcoin's bull market, which may signal a short-term bottom. Others argue that long-term fundamentals remain intact, as evidenced by renewed whaling activity and continued stocking.

The broader crypto market has echoed Bitcoin's volatility, with Ethereum and other major coins also experiencing higher levels of liquidity. As traders work around these developments, attention will shift to Bitcoin's ability to regain critical support levels around $97,000 and continue its historic rally.

According to BeinCrypto data, Bitcoin was trading as high as $98,404 as of this writing, marking a 4% drop since Friday's session open.