The crypto market experienced a major shake-up on Monday as Bitcoin, Ethereum, and Solana prices tumbled between 5% and 10%, leading to over $1.27 billion in leveraged futures liquidations. The sudden downturn erased billions in bullish bets, signaling one of the largest liquidation events in recent months.
According to data from CoinGlass, nearly 90% of the total liquidations came from long traders, amounting to $1.14 billion in bullish positions wiped out. Short traders saw about $128 million in liquidations as prices sharply corrected from weekend highs.
The sell-off came after Bitcoin fell from around $112,000 to below $106,000, sparking a chain reaction across major exchanges as leveraged traders were forced to close their positions.
Bitcoin Leads the Liquidation Wave
The largest single liquidation was recorded on HTX, where a $33.95 million BTC-USDT long position was forcibly closed. Meanwhile, Hyperliquid led the overall market activity with $374 million in forced liquidations, followed by Bybit with $315 million and Binance with $250 million.
The bulk of these liquidations — roughly 98% on Hyperliquid — were from long traders betting on continued price gains. However, when Bitcoin failed to hold above key resistance near $113,000, cascading sell orders were triggered across exchanges, amplifying the decline.
Bitcoin’s inability to maintain momentum, combined with thin order books and high leverage, made conditions ripe for a liquidation cascade. Analysts say that when market liquidity is low, even modest price movements can trigger large-scale liquidations, deepening the sell-off.
Ethereum and Solana Follow Bitcoin’s Lead
Ethereum (ETH) and Solana (SOL) were not spared from the market-wide correction. Combined, the two cryptocurrencies saw over $300 million in liquidations, as both assets mirrored Bitcoin’s sharp pullback.
Ethereum slipped below $3,600, while Solana dropped to around $165, erasing significant gains from earlier in the week. Traders who had positioned for a continued rally were forced to close out leveraged longs, adding to selling pressure.
The broader market also weakened as major altcoins followed suit. Many smaller-cap tokens saw double-digit losses amid the unwinding of speculative positions, signaling a return to risk aversion among crypto investors.
Understanding Liquidations and Market Mechanics
Liquidations occur when traders using borrowed funds (leverage) are forced to exit positions because their margin falls below maintenance levels. On crypto futures platforms, this process is automatic — the exchange sells off positions to prevent further losses.
Large clusters of liquidations can often signal capitulation points, where leveraged traders exit en masse, sometimes marking short-term bottoms in the market. Conversely, heavy short liquidations often precede local tops as bearish traders get squeezed out.
Analysts note that tracking liquidation clusters can provide insight into future price levels. Zones with high liquidation activity may act as short-term support or resistance, depending on market direction.
What Triggered the Sudden Sell-Off?
The liquidation wave followed Bitcoin’s rejection near $113,000, a level that traders have been watching closely as a short-term resistance zone. With low liquidity across major exchanges and overheated leverage, the downturn quickly snowballed.
“Bitcoin’s sharp retracement was largely a function of excessive leverage unwinding,” said a market analyst. “When you have billions in open interest and a sudden price drop, liquidation cascades become inevitable.”
The overall open interest across Bitcoin futures remains elevated, hovering near $30 billion, suggesting that leverage levels are still high even after the flush. Meanwhile, funding rates — a measure of how expensive it is to hold long positions — have eased only slightly, indicating lingering risk appetite.
Macro Factors Add Pressure
The broader macroeconomic environment also played a role in the downturn. Traders are awaiting the U.S. Federal Reserve’s rate decision later this week, with growing uncertainty over the central bank’s next move.
Although the Fed has cut interest rates twice in 2025, recent statements suggest a more cautious stance going forward. The possibility of fewer rate cuts has weighed on risk assets, including cryptocurrencies.
Institutional investors have also pulled back slightly. Bitcoin-linked exchange-traded funds (ETFs) recorded net outflows nearing $800 million last week, as buyers became more cautious amid volatility.
A “Clearing Moment” for Overheated Markets
Despite the panic, analysts say such liquidation events can be healthy in the long term. These “clearing moments” help reset leverage levels, flush out speculative excesses, and set the stage for more sustainable price movements.
Historically, similar liquidation cascades have often preceded periods of consolidation and recovery, as spot buyers gradually step back into the market.
At the time of writing, Bitcoin is trading around $106,500, recovering slightly from its lows. Ethereum and Solana have also stabilized modestly, but traders remain cautious ahead of upcoming macro events.
While volatility may persist, market observers note that the latest flush could ultimately strengthen the market’s foundation by reducing leverage and restoring balance between long and short positions.
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