Bitcoin and Ethereum prices experience sharp fluctuations, triggering large-scale liquidations and fueling widespread allegations of market manipulation.

On Wednesday, the cryptocurrency market experienced intense volatility, with leading cryptocurrencies including bitcoin (BTC) and ethereum (ETH) quickly reversing early gains seen in the US stock market.

Within just two hours, the price of bitcoin surged from $86,000 to over $90,000, but almost immediately fell back to around $85,000. Ethereum saw a similar trend, with its price rising from $2,900 to $3,100, then dropping to $2,800 within a few hours.

According to data from Coinglass, this sharp volatility triggered large-scale liquidations, resulting in over $400 million in leveraged positions being liquidated in the global cryptocurrency futures market. The largest liquidation order was a HYPE/USD position worth approximately $11.08 million on the decentralized perpetual contract exchange Hyperliquid.

Due to API delays/limitations at exchanges and a large amount of trading activity occurring off-exchange, liquidations during periods of sharp price swings in cryptocurrencies are often underestimated.

Ethereum led this round of liquidations, with over $150 million (mainly long positions) wiped out from the market. Bitcoin followed closely, with $140 million in liquidations, including $78 million in short positions.

Notably, Hyperliquid (HYPE) suffered the largest liquidation of the month, totaling $33 million.

This is not the first time such sharp price swings have occurred in the cryptocurrency market in December. In the past two weeks, the market has experienced more than four episodes of intense volatility.

Some market participants believe this is market manipulation, while others say the move was triggered by algorithms clearing out insufficient market liquidity.

Ongoing outflows from cryptocurrency ETFs have impacted market stability.

These movements occurred amid strong distribution of cryptocurrency exchange-traded funds (ETFs). This week, according to data from SoSoValue, net outflows from bitcoin and ethereum ETFs exceeded $1 billion over the past two days.

Mike Marshall, Head of Research at Amberdata, said: “We are seeing weak market structure below current prices, and relatively little ETF inflow, which reduces the market’s ability to quickly stabilize when momentum shifts.”

He noted that concerns about interests are mounting. Interest rates and a rise in cautious risk sentiment have exacerbated market weakness.

“In this environment, the market tends to keep probing until it finds a price level where buyers are confident. Based on our analysis of ETF cost bases, the first meaningful bottom is close to $80,000. If we continue to see outflows or tighter financial conditions, then $60,000 will become the next important reference level,” Marshall added.

As of press time on Wednesday, bitcoin and ethereum were trading near $86,000 and $2,800, respectively, down 2% and 4% over the past 24 hours.