The cryptocurrency markets experienced a significant leverage adjustment in the last 24 hours, with over $584 million in liquidations as heavily biased long positions were eliminated due to thin liquidity and fragile risk sentiment.
Bitcoin and major altcoins declined during U.S. trading hours as macroeconomic uncertainty continued to weigh on risk assets. Several crypto-related stocks, including prominent players like Coinbase and Strategy, faced steeper declines than the cryptocurrencies themselves.
AI-related stocks, such as Broadcom and Oracle, are still struggling from disappointing earnings results last week, as reported by CoinDesk earlier on Monday.
Data indicates that 181,893 traders faced liquidations, with long positions making up more than 87% of total losses—a clear indication that the decline was driven more by the market’s failure to maintain crowded bullish bets than by fresh bearish news.
Bitcoin and ether were the primary contributors to this wipeout, registering $174.3 million and $189 million in liquidations, respectively, according to liquidation heatmap data. The largest single liquidation was an $11.58 million BTCUSDT position on Binance.
Binance, Bybit, and Hyperliquid accounted for nearly three-quarters of the total liquidations, with Hyperliquid notably showing a severe imbalance: 98% of the liquidated positions were longs, highlighting how aggressively traders were positioned before the decline.
The liquidation event occurred without any major headline cause, reinforcing a broader market theme: rallies fueled by leverage instead of genuine demand are becoming increasingly unstable.
Market participants note that the wipeout structure resembles a classic liquidity sweep rather than panic selling. Prices fell just enough below key intraday support levels to trigger cascading stop-losses and forced liquidations, before stabilizing—a common pattern in range-bound or late-cycle conditions.
“The market remains highly sensitive to trader positioning,” stated one derivatives trader. “When leverage is heavily concentrated on one side, it doesn’t take much to initiate a reset—especially in thin holiday conditions.”
Altcoins also faced forced selling, albeit to a lesser extent. Solana experienced $34.5 million in liquidations, while XRP and Dogecoin saw $14.5 million and $11.8 million, respectively. The concentration of losses in major cryptocurrencies suggests that institutions and larger traders absorbed most of the impact, rather than just retail speculation.
Despite the magnitude of the liquidations, spot prices managed to maintain stability, supporting the notion that this event was a result of excessive positioning rather than a major market trend shift.
However, traders warn that repeated flushes of long positions indicate a weakening market structure. Unless leverage decreases and demand returns, volatility is likely to trend downward—leaving rallies susceptible to sudden reversals.
