Crypto markets recorded another $1bn of forced liquidations in under twenty-four hours, reinforcing a pattern where modest price moves trigger outsized losses and deepen already fragile conditions.
With Bitcoin slipping below $90,000 and Ether falling under $3,000, high leverage and thinning liquidity are creating sharper and faster spirals than those seen in traditional markets.
Billion-dollar wipeouts new routine
Coinglass data show about $1.02bn of positions liquidated in the latest session. More than 70% of the losses came from long positions worth roughly $726.5mn, with the remainder hitting shorts.
The most significant single liquidation was a $96.5mn Bitcoin position on Hyperliquid, highlighting how concentrated some of the risk has become. Over the past week, cumulative liquidations have exceeded $5bn as traders continue to load into 20x to 100x perpetual leverage and get caught by relatively small price swings.
Across the last 42 days, crypto has shed around $1.2tn in market value, about 28% of total capitalization, despite no major fundamental shocks. The market is still digesting the 10 Oct tariff scare, when President Trump’s warning of “massive” duties on China triggered about $19bn of liquidations in a single day.
Since that episode, $500mn liquidation days have become common, and $1bn cascades have appeared in clusters rather than isolated stress events.
Mechanically, the process is self-reinforcing. Small moves against crowded leverage wipe out margin buffers, exchanges auto-sell to close exposure, prices gap lower and new stops are hit. With spot buyers cautious and order books thinner than earlier in the year, liquidation flows, rather than news, are driving short-term price action.
Why crypto sells off harder than stocks
The contrast with equities is stark. Retail margin in US cash equity markets is typically capped at about three times. There are no 100x perpetual swaps on major venues and circuit breakers moderate intraday crashes.
Crypto trades nonstop and allows retail access to high leverage on assets that already move more sharply than most stocks. When liquidity thins, that structure magnifies drawdowns.
Leverage also extends beyond derivatives. Publicly listed digital treasury companies that borrow or issue shares to buy Bitcoin and Ether give investors another geared bet on token prices. During this downturn, several have fallen far more than the underlying assets as investors reassess paying $2 for what amounts to $1 of crypto exposure.
By comparison, recent equity weakness looks orderly. While AI-related names have seen volatile sessions, there have been no equity equivalents of daily $1bn margin cascades. Capital has rotated into defensive ETFs, while crypto continues to experience rapid intraday swings driven by futures positioning rather than cash inflows.
With institutional outflows elevated, spot liquidity under pressure and retail traders still chasing high leverage, market structure remains the dominant risk. Until leverage resets and balance sheets across derivatives and proxy vehicles normalize, crypto sell-offs are likely to stay sharper and more sudden than those in conventional markets.
You must be logged in to post a comment.