One of the most severe shakeouts to hit the cryptocurrency market in months is here. More than 193,000 traders lost more than $891,000,000 in leveraged positions in a single day, according to CoinGlass data.

According to the heatmap, Bitcoin and Ethereum are driving the carnage, with BTC coming in second at $275,000,000 and ETH seeing liquidations above $290,000,000. Significant losses were sustained by Solana, Dogecoin and XRP, with a series of liquidations compounding overall losses.

Bulls take massive damage

The disparity between long and short liquidations makes it obvious that longs were the most severely damaged. Almost $757,000,000 worth of long positions were lost in the last day alone, while only $116,000,000 worth of short positions were lost.

The failure to maintain momentum has now led to a series of forced sell-offs, despite the fact that bullish leverage had been building aggressively during Bitcoin’s ascent above $120,000. You can see the damage on the Bitcoin chart.

Testing Bitcoin resistances

Bitcoin recently made two tests of the $122,000 resistance level but was unable to make a strong breakthrough. Following the rejection, there was a decline below important moving averages, such as the 20- and 50-day lines.

Bitcoin is currently trading just over $110,000 in a balanced position close to the 100-day moving average. The asset could move toward $103,000, where the 200-day moving average is the last reliable support, if there is another breakdown.

Even though selling pressure has been fierce, a short-term relief bounce is still possible, as the RSI is currently trending close to oversold levels. The bigger picture, however, appears precarious: investor confidence has been damaged, and large-scale liquidations frequently leave lasting damage to market psychology.

What's next? 

What to anticipate next: Bitcoin’s momentum may level out if it can hold above $110,000 and swiftly recover $115,000. The next leg down, however, might come quickly if bears push the price below the $108,000-$110,000 support band, pulling the market as a whole into further correction territory.

The $891,000,000 carnage brings to light a persistent reality of cryptocurrency markets: positions with excessive leverage are a major source of volatility. This may be the end of the leverage-driven rally for Bitcoin unless spot demand picks up steam.