Bitcoin Dives Below $104K as DeFi Crisis Sparks $1.37B in Liquidations

The cryptocurrency market continued its sharp decline Tuesday morning as Bitcoin plunged below $104,000 — levels last seen in late June — amid intensifying fears from both the DeFi sector and broader macroeconomic uncertainty.

At publication time, Bitcoin traded at $103,849, down 3.2% in 24 hours and now 17.5% below its record high from early October. The sell-off has rippled across major altcoins, with Ethereum, XRP, BNB, and Solana posting losses between 5% and 9%.

Data from CoinGlass shows that crypto liquidations have surged to $1.37 billion over the past day, marking one of the largest wipeouts since the summer. The immediate trigger appears to be a spreading confidence crisis in decentralized finance after Stream Finance, a major DeFi protocol, disclosed roughly $93 million in lost fund assets on Monday.

The announcement has fueled contagion fears across the DeFi ecosystem, as multiple stablecoins and lending vaults face potential exposure and forced redemptions. Stream confirmed that it has retained legal counsel to lead a comprehensive review following the losses.

The current downturn follows a string of DeFi-related setbacks, including a $128 million exploit targeting Balancer in October and an earlier wave of mass liquidations that rattled leveraged traders across the market.

The market’s latest crash underscores the fragility of sentiment in a system still laden with high leverage and macroeconomic headwinds. Investors appear to be shifting to a defensive stance as uncertainty grips both crypto and traditional markets.