- Trending
- Comments
- Latest
Nearly $941 million in crypto liquidation occurred over the past 24 hours, according to data from CoinGlass, marking one of the largest wipeouts of the year. The majority of liquidations came from long positions, which accounted for $826.51 million, highlighting the risks of excessive leverage among bullish traders.
Bitcoin was at the center of the turmoil. The world’s largest cryptocurrency briefly fell below $110,000, triggering $277.21 million in bitcoin liquidations which is nearly 30% of the total. This sharp downturn followed a week of optimism after U.S. Federal Reserve Chair Jerome Powell signaled potential interest rate cuts during the Jackson Hole symposium on August 22.
“Whenever leverage builds up, any sharp price correction triggers cascading liquidations. That’s what we’re seeing now,” — Ben Caselin, Chief Strategy Officer, VALR Exchange, in a note to investors.
Just days earlier, Powell’s dovish remarks on interest rates had fueled a broad rally across the crypto sector. Bitcoin climbed to a weekly high of $116,960, close to the $117,000 mark, while the overall market added nearly $600 million in value. But those gains proved short-lived.
By August 26, bitcoin plunged back toward the $109,000 level, erasing much of its earlier momentum. The broader crypto market shed $200 billion in capitalization, falling from a recent peak of $4 trillion to $3.8 trillion.
“Markets tend to overreact to Fed signals. Traders rushed in on Powell’s comments but were over-leveraged, making the market vulnerable to sudden reversals,” — Clara Medalie, Director of Research, Kaiko.
Ethereum also faced selling pressure, dropping 4.9% to $4,429. Still, analysts noted ETH’s resilience compared to bitcoin’s steeper decline, suggesting a rotation in trader positioning.
The scale of the latest crypto liquidation event underscores persistent volatility across digital assets. Large liquidations occur when leveraged positions are forcibly closed by exchanges after collateral levels fall below maintenance margins.
Such wipeouts not only punish overexposed traders but also exacerbate market declines, as cascading liquidations accelerate downward price movements. Analysts say this dynamic reflects an ongoing tug-of-war between bullish and bearish sentiment.
“When $941 million is wiped out in a single day, it’s not just a story of poor risk management—it’s also a warning about the structural fragility of crypto markets,” — Matthew Sigel, Head of Digital Assets Research, VanEck.
The fact that most liquidations came from long positions suggests that investor optimism outpaced market fundamentals, leaving traders vulnerable to correction.
For crypto investors, the latest crypto liquidation wave raises pressing questions about the sustainability of current price levels and the broader health of the digital asset market. While Federal Reserve Chair Jerome Powell’s signals on potential monetary easing remain broadly supportive for risk assets, the sharp reversals seen in recent days highlight how quickly market sentiment can turn.
Bitcoin’s struggle to hold above $110,000 will be a critical test in the days ahead. Analysts warn that a sustained move below this threshold could set off another round of forced liquidations, putting even greater pressure on leveraged traders and potentially dragging down other major tokens. With the global crypto market cap slipping under $4 trillion, investor confidence is showing signs of fragility after months of bullish momentum.
Ethereum’s comparatively steadier performance holding in the mid-$4,000 range despite a near 5% dip which offers some reassurance, but experts caution that its resilience may not be immune to broader market dynamics. Traders remain highly sensitive to leverage imbalances, and cascading sell-offs across smaller altcoins could still spill over into Ethereum’s price action.
Beyond technical factors, macroeconomic uncertainty continues to loom large. Questions around the timing and extent of U.S. interest rate cuts, global growth concerns, and regulatory developments in major markets could all serve as catalysts for further volatility.
“Markets are pricing in optimism but remain vulnerable to any surprises from central banks or policy shifts,” — Clara Medalie, Director of Research at Kaiko, noted.
For institutional investors, the $941 million crypto liquidation highlights the importance of risk management strategies such as position sizing, hedging, and monitoring margin exposure. Retail participants, meanwhile, are being reminded that leverage can magnify gains in a rising market but can just as easily accelerate losses when prices swing the other way.
In short, while long-term adoption trends remain positive, the immediate outlook is defined by heightened uncertainty. Unless market conditions stabilize, crypto investors should prepare for more turbulence, with liquidations likely to remain a recurring feature of the trading landscape.
Ethereum’s steadier performance offers some relief, but traders remain wary of leverage imbalances. Many analysts expect volatility to persist in the weeks ahead, particularly if macroeconomic uncertainty continues to drive speculative positioning.
For now, the $941 million crypto liquidation serves as both a cautionary tale and a reminder that leverage, while amplifying gains, can just as quickly magnify losses.
Copyright © 2025 - The Bit Gazette.
