Crypto Market Rocked by $2 Billion Liquidation Event, Stays on High Alert
The cryptocurrency market is once again experiencing significant turbulence, reeling from an intense wave of liquidations that wiped out over $2 billion in leveraged positions within a single 24-hour period. This dramatic unwinding event is described as one of the most severe since October's historic crash, leaving traders grappling with heightened uncertainty and a fragile market landscape.
Over $2 Billion Erased in Rapid Sell-Off
Data from Coinglass reveals that more than $2 billion across both long and short positions were liquidated, with Bitcoin (BTC) plummeting to $82,000 and Ethereum (ETH) sliding below $2,700. Long positions bore the brunt of the sell-off, accounting for over $1.8 billion in losses across major exchanges. A notable instance included a massive $36.78 million BTC-USD position on Hyperliquid being liquidated. In total, Bitcoin long liquidations reached approximately $966 million, while Ethereum long positions saw around $407 million in losses, signaling widespread investor capitulation in the face of downward price pressure.
Options Expiry and Whale Activity Amplify Pressure
Adding to the market's woes is a looming $4.2 billion crypto options expiry, involving over 39,000 BTC options and 185,000 ETH options. Traders are increasingly leaning into put options, indicating expectations of further price declines. The current "max pain" points, where the most options contracts expire worthless, sit near $98,000 for Bitcoin and around $3,200 for Ethereum, both significantly above current prices. This bearish sentiment is further compounded by reports of a long-term Bitcoin whale, active since 2011, reportedly selling over 11,000 BTC (worth approximately $1.3 billion), intensifying downward pressure. However, amidst the chaos, signs of resilience emerged as other large holders accumulated over $65 million in spot BTC near the $85,000 level, hinting at strategic dip-buying.
Market Fragility and Future Outlook
The current market instability can be traced back to October's monumental $19.5 billion liquidation event, which severely impacted liquidity conditions. Market makers remain cautious, contributing to an environment where even minor price swings can trigger cascading liquidations. Despite the turmoil, underlying infrastructure players like Solana and Fireblocks demonstrated remarkable resilience, maintaining high transaction speeds and network reliability during peak stress. As macroeconomic uncertainties, ETF outflows, and unpredictable whale movements continue to shape sentiment, the crypto market remains perched precariously, with traders keenly observing whether this correction will deepen or pave the way for a swift recovery.
