Bitcoin experienced a dramatic price drop, losing over $10,000 in a single day as derivatives trading triggered massive liquidations. The cryptocurrency's value fell to around $64,000-$65,000, marking one of its steepest declines in recent years. This sharp downturn was driven by forced liquidations and extreme downside momentum, highlighting the influence of synthetic Bitcoin supply from financial instruments like futures, options, and ETFs. The crash underscores a shift in Bitcoin's price formation, where derivatives now play a more significant role than spot transactions. This change has diminished the impact of blockchain scarcity on market prices, with institutional leverage amplifying volatility. Analysts noted that the market's structure resembles fractional reserve price discovery, with multiple financial claims on a single Bitcoin. The recent liquidation event was compared to historic collapses in commodities and equities, as automated selling accelerated the decline once margin thresholds were breached. Despite expectations that institutional products would stabilize volatility, the concentration of leverage has increased sensitivity to market shocks. Bitcoin's current trading environment mirrors patterns seen in other financialized markets, with derivatives and liquidation flows central to price movements. As a result, Bitcoin now behaves more like a leveraged financial instrument than a scarce digital commodity.