Leading cryptocurrencies plummeted Tuesday overnight, triggering large liquidations of bullish bets.

What Happened: Bitcoin tanked from $57,790 to $55,676 in a matter of 15 minutes late evening, before clawing back to $56,400.

The steep descent rippled across the market, with Ethereum too plunging to the early $2,300s.

The slump resulted in liquidations topping $98 million in the last hour, with $91 million in upside bets getting wiped out at the time of writing. The total liquidations in the past 24 hours soared to $198 million.

Bitcoin's Open Interest dropped 4.14% in the past 24 hours, providing further evidence of bulls being wiped out. The Long/Short Ratio dipped further, indicating the dominance of bearish bets.

The market remained in "Fear" as of this writing, according to the Cryptocurrency Fear & Greed Index.

Top Gainers (24-Hours)

The global cryptocurrency market stood at $2.02 trillion, following a contraction of 2.56% in the last 24 hours.

Stocks plunged Tuesday, recording their worst day since the Aug. 5 sell-off. The Dow Jones Industrial Average Futures tumbled 626.15 points, or 1,51%, to close at 40,936.93. The S&P 500 slipped 2.12% to end at 5,528.93, while the tech-heavy Nasdaq Composite sank 3.26%, finishing at 17,136.30.

AI leader Nvidia Corp. (NASDAQ:NVDA) tanked 9.53%, further declining by 2.42% in after-hours trading after receiving a subpoena from the U.S. Department of Justice (DOJ.)

The slump came after fresh data revealed a contraction in U.S. manufacturing activity for the fifth consecutive month, reigniting fears of a recession. Furthermore, August marked the 21st month of contraction in the past 22 months.

Analyst Notes: Popular cryptocurrency trader Justin Bennett stated that $53,000 has been his target since Bitcoin was rejected at $63,000. Having said that, he didn't rule out the possibility of Bitcoin plunging further to $48,000.

"Markets love symmetry, and fakeouts to one side of a pattern usually trigger extended moves in the opposite direction," Bennett remarked.

$BTC $53k has been my target since the $63k failure (see posts from mid-August), but don't rule out $48k.
Markets love symmetry, and fakeouts to one side of a pattern usually trigger extended moves in the opposite direction.#Bitcoin pic.twitter.com/aQZwKbyYkY

— Justin Bennett (@JustinBennettFX) September 3, 2024

On an alarming note, widely followed cryptocurrency analyst Ali Martinez spotted a potential trend reversal from bullish to bearish by the stochastic RSI on Bitcoin's 2-month chart.

"Historically, in the past 10 years, this has preceded a significant correction of around 75.50%!" Martinez emphasized.

An important observation on the #Bitcoin 2-month chart: the Stochastic RSI has just signaled a trend reversal from bullish to bearish. Historically, in the past 10 years, this has preceded a significant correction of around 75.50%! pic.twitter.com/YxlwMFxTEl

— Ali (@ali_charts) September 3, 2024