Altcoin Leverage Frenzy Sparks $13M Crypto Bloodbath – Liquidations Hit Record Highs

Crypto traders just got a brutal reminder of leverage's double-edged sword. As altcoin speculation hits unsustainable levels, the market exacts its pound of flesh.

Liquidation carnage spreads

Over $13 million in positions evaporated in hours—proof that even in a bull market, greed gets punished faster than you can say 'risk management.' The altcoin leverage ATH wasn’t a milestone—it was a trap.

Bonus jab: Wall Street’s ‘professionals’ lose this much in coffee spills. Crypto does it before breakfast.

Key Takeaways

Ethereum alone lost nearly $8 million in massive crypto liquidations. Open Interest in altcoins hit a record $45 billion, exposing the market’s fragility. Unless leverage cools down, more volatility could be on the way.

The market has just endured a sharp and sudden shakeout, with massive crypto liquidations triggered over the past 24 hours. ethereum [ETH] led the losses, followed by Bitcoin [BTC] and a handful of altcoins, as a surge in Open Interest and excessive leverage left long positions dangerously exposed.

With Open Interest for top altcoins hitting an all-time high of $45 billion, the wipeout could be a sign of growing fragility in a market stretched thin by speculative bets.

Crypto liquidations – Which assets were hit the hardest?

At press time, Ethereum bore the brunt of the latest liquidation wave, with $7.95 million in positions wiped out. In fact, it was the biggest single casualty in the market.

Bitcoin followed suit with $2.2 million in losses, while DOGE and ENA saw figures of $1.55 million and $1.17 million, respectively. solana [SOL] also registered notable liquidations, though under $1 million.

Source: Coinglass

Most other assets saw minor losses too – A sign that the sell-off was concentrated, rather than sector-wide.

Overheated leverage sets the stage for drop

The latest liquidation wave appears to have been triggered by excessive leverage building up across the altcoin market.

According to Glassnode, Open Interest for top altcoins hit an all-time high of $45 billion just before the sell-off.

Source: Glassnode

As can be seen on the chart, this surge began in early July, reflecting a sharp hike in speculative activity.

Usually, such parabolic spikes in leverage have preceded violent market corrections. With positioning stretched and funding rates elevated, it took only a minor price drop to spark a chain reaction of liquidations across the board.

Going forward

Crypto markets remain highly sensitive to Leveraged positioning, especially in the altcoin sector. While Bitcoin stayed relatively stable, the scale of liquidations in other coins suggests that sentiment became overly euphoric.

Unless Open Interest resets to healthier levels, further volatility will be likely. Particularly if macro uncertainty or profit-taking trigger additional downward pressure. For now, the market may enter a cooling-off period, with traders more cautious about aggressive long exposure.

On the contrary, if leverage quickly returns, another liquidation cascade may not be far behind.