The cryptocurrency market began the week with a significant downturn, witnessing one of the sharpest declines of 2025, as it lost more than $151 billion in market value in just one day. Data from CoinGlass reveals that over $1.7 billion in leveraged positions were liquidated within a 24-hour period, leaving over 402,000 traders facing losses.
Ethereum (ETH) experienced the most substantial impact, with nearly $500 million in liquidations. In contrast, Bitcoin (BTC) saw about $284 million wiped off its value. Other altcoins, including XRP, Solana, Dogecoin, and Hyperliquid (HYPE), suffered losses ranging from 7% to 12%, erasing recent gains and marking a sudden end to the latest altcoin rally.
The sell-off commenced when Bitcoin fell below the $113,000 mark, triggering margin calls and automated sell-offs. The situation escalated rapidly; within just 30 minutes, liquidations surpassed $1 billion, highlighting the precarious nature of highly leveraged trading environments.
In the wake of this downturn, the market sentiment shifted dramatically. The Altcoin Season Index, which had recently peaked at 100 points, plummeted to 64, indicating a significant shift in traders’ focus back toward Bitcoin. As a result, Bitcoin’s dominance increased to 57%, while Ethereum’s dominance dipped to 13%. Historically, altcoin seasons tend to last only a few weeks before liquidity has rotated back into Bitcoin, and analysts suggest this recent liquidation event may have prematurely concluded the altcoin cycle.
Smaller tokens, such as ASTER, WLFI, and PUMP, that had recently experienced speculative surges were also among the hardest hit, with over $263 million in altcoin long positions liquidated.
Amidst the steep losses, some analysts argue that the pullback could represent a healthy reset for the market instead of signaling the end of the bull cycle. They believe that overleveraged traders being washed out may create more robust support levels for long-term investors. Institutional demand for cryptocurrencies appears to remain strong, as Bitcoin and Ethereum ETFs registered consistent inflows last week, indicating large investors are continuing to buy during this dip. Additionally, on-chain data points to around 420,000 ETH leaving exchanges, suggesting there is ongoing accumulation even amidst short-term volatility.
The market’s future trajectory now depends on whether Ethereum can maintain its position above $4,100 and whether Bitcoin can stabilize within the $112,000 to $114,000 range. Despite the prevailing skepticism among traders, analysts are optimistic that the current correction is laying the groundwork for the next upward movement in this ongoing bull market.
