$1B Leverage Wiped Out in Crypto Shakeout—But Traders Call It a ’Healthy Correction’

Crypto just took a chainsaw to overleveraged positions—and analysts are oddly relieved.

Blood in the streets (for now): A sharp pullback vaporized $1 billion in bullish bets this week as Bitcoin and altcoins dipped. Yet market veterans insist this flush was necessary—like a trader's version of eating their vegetables.

Leverage liquidation cascade: The slide triggered mass liquidations, with over-optimistic longs getting wrecked. Exchanges saw forced selling as margin calls hit—classic crypto market mechanics at work.

'Technical reset, not doom': 'This isn't 2022 again,' quips one desk analyst. 'We needed this after the 90-day rally. Now the market's not sitting on a tinderbox of unchecked leverage.' (Wall Street bankers would've charged $5 million to deliver that insight.)

The takeaway? Crypto's two-step forward, one-step back dance continues—with fewer degenerate bets weighing it down... for now.

That's the largest long liquidation since at least the late July-early August plunge. That time, BTC dipped below $112,000 and many altcoins saw double-digit pullbacks, eventually carving out the local bottom for most of the digital asset market.

"The 'I guess opening a 50x long after a 7-day 50% MOVE was not the best idea' type of shakeout here," well-followed trader Bob Loukas said in an X post.