The cryptocurrency market has registered an unprecedented wave of liquidations, marking the most significant upheaval since early December 2024. A staggering $1.68 billion in leveraged positions disappeared in just one day, affecting 390,029 traders, as reported by CoinGlass.
Ethereum bore the brunt of the sell-off, with liquidations amounting to $501.63 million. Bitcoin followed, losing $287.01 million, while other major cryptocurrencies like Solana, XRP, and Dogecoin recorded losses of $95.92 million, $77.96 million, and $61.32 million, respectively. Altcoins collectively added to the turmoil with an additional $257.56 million lost. The largest individual liquidation event occurred on the OKX exchange, where a BTC-USDT swap worth $12.74 million was executed in one fell swoop.
The overall liquidation landscape was heavily tilted towards long positions, with figures showing losses of $1.6 billion for longs compared to a mere $85.9 million for shorts. This trend was consistent across all time frames; notably, $1.53 billion of a total $1.59 billion in liquidations over a 12-hour period stemmed from long positions. Even in a more immediate four-hour snapshot, longs were more significantly affected, losing $30.22 million against $10.85 million from shorts.
Commenting on the situation, Binance’s founder, CZ, remarked on the necessity of these price drops, likening them to establishing foundational support levels akin to a house’s groundwork. He emphasized that such shakeouts are often prerequisites for forming resilient price floors.
Amid this turmoil, market dynamics revealed a contrasting trend in traditional assets; while Ethereum declined by nearly 10%, gold reached record highs—a stark deviation from previous correlations between crypto and commodities. Speculation about a potential hack at Bybit, which the exchange quickly refuted, added to the volatility. Bybit assured users that their funds remained secure and trading systems continued to function normally.
Looking ahead, traders are optimistic about the upcoming month, often referred to as “Uptober.” Historical data suggests that September has been a challenging month for major cryptocurrencies, with Bitcoin experiencing declines of up to 37.9% in 2020 and Ethereum falling by 17.5% in 2018. In contrast, October has historically yielded positive returns, with Bitcoin averaging a gain of 15% and Ethereum delivering substantial increases, such as 42.8% in 2021 and 58.7% in 2020. The recent liquidation event, occurring just as the month transitions, could potentially set the stage for a market rally or indicate underlying fragility going forward.
