Crypto Carnage: $1.7 Billion in Derivatives Wiped Out in Market Meltdown

Digital asset markets got steamrolled as leveraged positions evaporated in a cascade of liquidations.

The Domino Effect

Margin calls triggered a chain reaction across exchanges—forcing sell-offs that amplified the downward spiral. Traders watched helplessly as positions got liquidated faster than you can say 'decentralized finance.'

Derivatives Danger Zone

Futures and perpetual swaps magnified the pain, turning modest dips into full-blown carnage. The $1.7 billion bloodbath exposed the dark side of crypto leverage—where 100x dreams meet instant nightmare scenarios.

Wall Street's Ironic Smirk

Traditional finance types are probably sipping champagne while muttering 'told you so'—because nothing makes bankers happier than watching crypto traders learn about risk management the hard way.

This isn't your grandma's market correction—it's a brutal reminder that crypto moves fast and breaks things. Including bank accounts.

Ethereum’s rally temporarily halted

The year 2025 brought several regulatory milestones that gave alternative digital assets such as Ethereum an outsized boost. The US Congress passed the GENIUS Act, which for the first time establishes stablecoin regulations and exempts compliant issuers from direct SEC and CFTC oversight. At the same time, the House of Representatives is working on bills to promote crypto market structure (CLARITY Act) and to ban a Fed-issued CBDC. These developments led to clear outperformance in recent months – after Bitcoin had dominated the market for more than twelve months.

However, markets tend to overshoot when high leverage is involved – as was once again the case. Despite price consolidation, the number of open derivatives positions (“open interest”) remained at an all-time high. Traders continued to build leveraged positions even as the market turned against them. This culminated in a liquidation cascade, as seen last night: ethereum (ETH) briefly dropped -8.6% and once again tested the spring high at 4,000 USD.

Altcoin season still on hold

Other altcoins were not spared either. All of the top 20 coins by market capitalization slipped into negative territory over the past 24 hours. The most resilient were Bitcoin (-2.50%), Tron (TRX, -2.70%), and BNB (-3.33%). The hardest hit were Dogecoin (DOGE, -10.31%), Cardano (ADA, -8.54%), and Hyperliquid (HYPE, -8.15%). It now comes down to whether the markets can establish a bottom.

Haftungsausschluss
Alle Angaben in dieser Publikation erfolgen ausschliesslich zu allgemeinen Informationszwecken. Die in dieser Publikation zur Verfügung gestellten Informationen stellen keine Anlageberatung dar und sind auch nicht als solche beabsichtigt. Diese Publikation stellt kein Angebot und keine Empfehlung oder Aufforderung für eine Anlage in ein Finanzinstrument einschliesslich Kryptowährungen und dergleichen dar und ist auch nicht als Angebot, Empfehlung oder Aufforderung beabsichtigt. Die in der Publikation enthaltenen Inhalte stellen die persönliche Meinung der jeweiligen Autoren dar und sind nicht als Entscheidungsgrundlage geeignet oder beabsichtigt.

Risikohinweis
Anlagen und Investitionen, insbesondere in Kryptowährungen, sind grundsätzlich mit Risiko verbunden. Der Totalverlust des eingesetzten Kapitals kann nicht ausgeschlossen werden. Kryptowährungen sind sehr volatil und können daher in kurzer Zeit extremen Kursschwanken ausgesetzt sein.