Crypto Bloodbath: Over $1.1B in Long Positions Liquidated in Market Rout
Digital assets face brutal selloff as leveraged traders get crushed
LIQUIDATION CASCADE
The crypto market's leverage machine just blew a gasket. Over $1.1 billion in long positions got liquidated as prices tanked across the board. Margin calls hit like dominoes—forcing traders to sell into falling markets, which pushed prices lower, triggering more liquidations. Classic leverage death spiral.
WHEN BULLS GET SLAUGHTERED
Exchanges automatically closed leveraged positions when collateral values dropped below maintenance thresholds. The $1.1 billion liquidation figure represents the total value of positions forcibly exited. Most casualties came from perpetual futures contracts—the crypto world's favorite casino chips.
MARKET MECHANICS MEET REALITY
Liquidations aren't just numbers on a screen. They represent real capital destruction and psychological damage. When leveraged longs get wiped out, it removes buying power from the market. The very traders who should be buying the dip are instead getting margin called out of existence.
TRADITIONAL FINANCE SNICKERS
Wall Street veterans are probably chuckling into their spreadsheets—watching crypto 'innovators' rediscover why leverage is called a double-edged sword. The same risk management principles that apply to boomer stocks apparently work for magic internet money too. Who knew?
This isn't the first liquidation event and won't be the last. Crypto markets have short memories and even shorter risk management attention spans. The $1.1 billion lesson? Leverage cuts both ways—especially when you're long and wrong.
The total crypto market cap dropped over 4.2% on Thursday to hover about $3.8 trillion during the mid North American session. Bitcoin (BTC) price slipped over 3% during the past 24 hours to reach a range low of about $108,787 before rebounding to around $109,693 at press time.
Ethereum (ETH), Solana (SOL), and Dogecoin (DOGE) led the wider altcoin market in a drop of more than 6%. As such, the crypto Leveraged market extended the heavy liquidation of long traders recorded earlier this week with a total of $1.13 billion rekt today.
Top Reasons Why Crypto Dropped Today
Long Squeeze Impact
Since Monday, more than $2.8 billion has been liquidated from the leveraged crypto market, mostly involving long traders. As such, the wider crypto market has felt the impact of a long squeeze as more traders continue to turn bearish.
Technical Headwinds
The wider crypto market has been forming a short-term bearish outlook in the last few weeks. For instance, the Bitcoin price has been forming a symmetrical falling trend in the past two months.
With the wider crypto market highly correlated to Bitcoin, a bearish outlook is expected to continue in the NEAR future. Moreover, more investors have been taking refuge in Gold, which recently broke out in a parabolic move.
Sell-the-News on Fed Rate Cut
The crypto market has experienced a series of cooling-offs since the Federal Reserve initiated its first rate cut of 25 bps on September 17. Crypto traders had anticipated the recent Fed rate cut, thus piled up buy orders, and have since been taking profits in a classic sell-the-news scenario.
What’s Next?
Is Altseason Out of the Picture?
According to crypto analyst Benjamin Cowen, the wider altcoin market will continue to bleed to Bitcoin until the end of October. As such, Cowen believes that Bitcoin dominance is likely to surge above 60% in the coming weeks.
The crypto analyst has reiterated that previous altseasons were too early as the real altcoin rally will likely kickstart in November after ethereum price records consistent new all-time highs. The ongoing approval of spot altcoin ETFs by the U.S. SEC is a major milestone that will bolster an imminent altseason possibly before the end of this year.
