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The cryptocurrency market experienced over $1 billion in liquidations in 24 hours ending Thursday evening, with nearly 70% concentrated in long positions as Bitcoin and Ethereum led sharp declines, according to Coinglass data. Ethereum accounted for $115 million in liquidations while bitcoin saw $80 million, as negative funding rates signaled growing bearish sentiment among leveraged traders.
Tom Andrews, senior analyst CryptoQuant, said: “The liquidations indicate that market sentiment is very fragile among retail traders and leveraged positions.”
Despite the large liquidation, Bitcoin futures open interest remained around $25 billion.
However, funding rates on Binance and OKX remained negative between -2% and -3%, indicating that traders are expecting further price declines.
Maya Collins, Derivatives Researcher, Bitget, said: “Negative funding rates reflect traders’ reluctance to take risk aversion and long positions.”
Sentiment in the options market remained somewhat mixed. The 1-week 25 delta skew increased to 12.6%, indicating that some investors are buying call options in anticipation of a potential recovery.
Meanwhile, the 24-hour put/call volume ratio remained balanced, reflecting steady interest from both buyers and sellers.
Altcoins were under heavy pressure on Thursday. TAO, ASTER, LDO fell over 12%, while TRX showed modest gains despite the market downturn.
Low liquidity and cautious sentiment prevented any significant recovery, as traders adopted a strategy to avoid liquidations.
According to the Binance Liquidation Heatmap, $110,009 is a key threshold for Bitcoin.
Analysts warn that if this level is broken, additional liquidations could be triggered, which could increase short-term volatility.
Along with the crypto market downturn, the Dow Jones saw a 300-point decline, and the S&P 500 and Nasdaq Composite saw a 0.6% and 0.5% decline, respectively.
Debt problems at regional banks such as Zions Bancorporation and Western Alliance also created pressure in the stock market, raising concerns about credit risk.
US-China trade tensions and a third week of government shutdown dampened global risk appetite.
The absence of key economic data and falling Treasury yields have driven investors to safe haven assets like gold, which hit a new high of $4,300 an ounce.
Analysts say the liquidations reflect high leverage and weak investor sentiment, which could persist in the short term.
Ethan Morris, Chief Economist, Digital Asset Insights, said: “Until economic conditions become clearer and liquidity improves, market volatility will continue.”
Given the global uncertainty, traders are advised to manage trading exposure carefully, as the market is going through a highly unpredictable phase of the quarter.
