$642M Longs Liquidated as Bitcoin Plunges to July Lows - Bull Trap or Buying Opportunity?

Bloodbath hits crypto markets as Bitcoin craters to multi-month lows, vaporizing leveraged positions in spectacular fashion.

The Great Liquidation Event

Over half a billion dollars in long positions got obliterated in mere hours as Bitcoin's price action turned savage. The cascade of liquidations triggered panic selling across derivatives markets, creating the perfect storm for maximum pain.

Technical Breakdown

Support levels shattered like glass as BTC sliced through key psychological barriers. The move caught even seasoned traders off guard, proving once again that crypto markets specialize in transferring wealth from the impatient to the disciplined.

Market Psychology at Play

Fear and greed swung violently toward capitulation territory. Weak hands folded while institutional players watched from the sidelines—probably waiting to scoop up assets from emotional retail traders who still think leverage is free money.

Another day, another reminder that crypto doesn't care about your stop-losses or your margin calls. The only thing more predictable than these wipeouts are the Wall Street analysts who'll now emerge to explain why they saw it coming all along.

Bybit was the epicenter of forced closures, responsible for $304 million in liquidations, 87% of which were long positions. Binance followed with $209 million in liquidations, again skewed toward longs at over 75%. OKX saw $117 million flushed out, while smaller platforms like Gate and HTX contributed tens of millions more.

Interestingly, Bitfinex and Bitmex were the outliers where short positions dominated liquidations. This tells us that exchange-specific positioning can deviate sharply from the general market.

The scale of long liquidations points to the overextension of bullish leverage at elevated price levels. Traders had been building directional bets on continued strength, especially given Ethereum’s new peak over the weekend. But, when Bitcoin failed to sustain above $114,000 and Ethereum slipped below $4,700, cascading margin calls triggered forced sell orders.

This intensified the downside MOVE and reinforced the feedback loop of liquidation-driven selling pressure. The largest single order during this period occurred on OKX, with a BTC-USDT swap liquidation valued at $12.49 million.

The weight of BTC and ETH is clearly seen in the liquidation heatmap. Together, they accounted for over $530 million in forced closures.

Other large-cap tokens like Solana and Dogecoin were hit as well, though at much smaller magnitudes, reflecting their lower share of speculative leverage.

Altcoins with thinner liquidity pools saw pockets of sharp forced selling, but the dominant theme of the day was the structural unwinding of BTC and ETH leverage.