Dogecoin, Solana and Ethereum Plunge as Crypto Liquidations Near $1.7B - Market Correction or Buying Opportunity?
The crypto market just took a brutal haircut—three major players got absolutely hammered in a liquidation bloodbath approaching $1.7 billion.
Massive Liquidations Rock the Market
Dogecoin's meme magic evaporated faster than a Snapchat message. Solana's high-speed blockchain got stuck in reverse gear. Even Ethereum—the blue-chip darling—couldn't escape the selling frenzy that vaporized nearly two billion dollars in leveraged positions.
Traders Get Rekt in Leverage Purge
Margin calls echoed across exchanges as overextended positions got liquidated en masse. The cascade effect turned paper gains into very real losses—proving once again that crypto moves faster than a Wall Street banker heading to the Hamptons on Friday afternoon.
Market Structure Under Pressure
This isn't just another dip—it's a full-scale leverage reset that's testing infrastructure across decentralized and centralized platforms. The sheer scale of liquidations suggests systemic pressure that could trigger further volatility as positions continue to unwind.
Remember: smart money buys when there's blood in the streets—even if that blood is digital. The fundamentals haven't changed, just the margin requirements.
A "classic liquidity spiral"
Sector breakdowns pointed to sizable losses in riskier categories, with Leveraged futures and perpetual positions seeing outsized liquidations relative to shorts.
“Leveraged longs were the first to be squeezed, draining liquidity and widening spreads in a classic liquidity spiral,” Vincent Liu, chief investment officer at Kronos Research, told Decrypt.
Still, despite the “short-term carnage,” the liquidations expose “where capital was stretched too thin, while accumulation will slowly rebuild market depth,” he said.
The liquidations reflected forced unwinding of leveraged longs, with shorts accounting for only about $84 million.
Asked about exposure, Liu said that “large-cap altcoins and leveraged DeFi tokens” are most at risk, with liquidations “hitting those with thinner liquidity first.”
Such a scenario “reflects a risk-off sentiment, where traders are trimming positions across the board,” and shows how the market stress-tests liquidity.”
The latest wave unfolded amid a volatile macro backdrop after the Federal Reserve’s recent rate cut, which barely budged the market and even resulted in a brief rebound before the weekend.
Looking ahead, the crypto market’s next moves “may hinge on Thursday’s jobless claims and Friday’s August PCE inflation data,” Liu said, adding that “a dovish read could spark a bounce, while hawkish surprises may trigger further stress the market.”
