Bitcoin dropped by $5,000 in recent hours to a low of $28,560 after trading at $33,600 earlier this morning. The asset then recovered from the sudden price plunge to trade over the $30,000 mark as of press time.

Bitcoin plunged over $5,000 in a few hours this morning. (Image: BTC/USD via TradingView)

This sudden drop comes just days after Bitcoin broke a new all-time high of $34,700 signalling a huge amount of new, institutional money flowing into the space.

The move triggered price liquidations to the tune of billions of dollars for futures traders betting on the price movements of Bitcoin, data from tracking site Bybt showed.

Liquidations occur when traders borrow assets from exchanges to place bigger trades than their principal capital. The positions are then “liquidated” when prices go against the trades to a level nearing the value of their account (or nearing a predetermined amount).

Over $1.14 billion punted by Bitcoin traders was liquidated in the past 12 hours, with $715 million, or over 23,000 BTC, of that occurring in the past hour alone.

The story was the same across the broader crypto market, with a total of $1.1 billion in positions getting liquidated across various cryptocurrencies.

Today’s liquidations followed January 3 figures of over $1.69 billion worth of “long” positions getting liquidated across various crypto exchanges, with over $567 million of those occurring on Binance alone.

Meanwhile, the price action suggested why Bitcoin remains infamous for its inherently volatile nature in traditional circles, even as the tone has shifted to a positive one in the past year among several institutional players.