Key Insights:
- Crypto market liquidations hit a record $19.5B, surpassing FTX and COVID crashes.
- Over 1.6 million traders wiped out within 24 hours.
- Analysts say downside liquidity cleared, setting stage for a short squeeze.
Crypto Market Faces Historic $19.5B Liquidation Shock
The crypto market witnessed its largest-ever liquidation event in the past 24 hours, erasing nearly $19.5 billion in leveraged positions. According to data shared by Coin Bureau, this was 17 times larger than the COVID-era crash and 13 times bigger than the FTX collapse, marking an unprecedented moment in market history.
Over 1.6 million traders were liquidated within a single day, with $16.68 billion in long positions and $2.45 billion in shorts wiped out. “Another history made,” Coin Bureau posted on X, highlighting the record-breaking nature of the event.
The largest single liquidation order, valued at $203.36 million, occurred on the Hyperliquid exchange in the ETH-USDT pair. Market observers described it as a textbook example of excessive leverage meeting a sharp liquidity imbalance.
Analysts Compare Crypto Market Crash to COVID and FTX Collapses
Michaël van de Poppe, founder of MN Trading, noted that the pattern mirrored “the final capitulation we had to witness,” similar to both the COVID crash in March 2020 and the FTX low in November 2022.
He added that Bitcoin’s next move hinges on whether it can hold above its 20-week moving average. A weekly close above that level, he said, would suggest the market has already found its bottom.
“If Bitcoin closes above and we bounce nicely, this was the final flush,” van de Poppe wrote on X.
The remarks echoed broader market sentiment that the crash may have cleansed excessive leverage built up during the latest rally. Still, traders remain divided on whether the move marked the end of the correction or merely a pause.
“Downside Liquidity Swept” Traders Eye Short Squeeze Potential
Amid the widespread liquidations, some analysts spotted a possible bullish setup.
Trader Mister Crypto posted that “downside liquidity has been swept” and that “all the liquidity now sits on top,” signaling the potential for a short squeeze.
That comment reflected a technical interpretation of the market structure, where aggressive liquidations often precede a sharp reversal as market makers hunt remaining positions. If accurate, this would mean the liquidation cascade could trigger a short-term rebound.
However, other traders warned against premature optimism. With liquidity now heavily concentrated near resistance zones, any bounce could face swift rejection unless spot demand increases meaningfully.
Such dynamics are typical during extreme market events, where algorithmic traders and derivatives platforms dominate price action.
Exchanges See Record Liquidations as Volatility Returns
The liquidation wave swept through all major exchanges, including Binance, OKX, Coinbase, and Bybit. Hyperliquid, an emerging derivatives platform, reported the single largest liquidation of $203 million in Ethereum perpetuals, underscoring the rising role of on-chain trading venues in high-leverage markets.
Data shared by MartyParty showed total liquidations reached $19.13 billion, confirming the magnitude of the selloff. He called it “the largest liquidation event in history,” surpassing previous volatility spikes by a wide margin.
Market analysts attributed the move to overleveraged long traders who misjudged the depth of the recent pullback. The liquidation cascade triggered a domino effect, amplifying losses as liquidation engines automatically closed positions at market prices.
Bitcoin’s Position Critical After Historic Flush
Bitcoin (BTC) bore the brunt of the crash but has since shown early signs of stabilization. The asset briefly tested major support near the 20-week moving average, a technical threshold closely watched by long-term traders.
Michaël van de Poppe stressed that holding above this level could confirm capitulation and open the door for recovery. “It’s all depending on whether Bitcoin holds above the 20-week MA,” he reiterated.
Despite the massive derivatives purge, on-chain data shows no widespread panic among long-term holders. Exchange inflows remain subdued, suggesting most selling pressure came from liquidations rather than spot selloffs.
If Bitcoin holds its ground, analysts expect volatility to remain elevated as traders rebuild positions and reassess leverage exposure.
Leverage Unwinds, Crypto Market Awaits Rebalance
The event highlighted the risks associated with excessive leverage in the crypto market. Periods of calm often lead to the accumulation of risky positions that unravel violently when liquidity dries up.
Coin Bureau’s observation of a $19.5 billion liquidation underscores how derivatives activity continues to dominate trading volume. The scale of the wipeout may force exchanges to tighten margin requirements or adjust funding rates to restore balance.
While short-term sentiment remains fragile, some traders see a silver lining. The removal of leveraged positions could lay the groundwork for a healthier price structure ahead of the next cycle.
Still, the event stands as a stark reminder of crypto’s volatility and how swiftly excess can turn to chaos.
Moses K is a crypto journalist covering markets, regulation, and blockchain trends. He has written for The Coin Republic, Coinchapter, Cryptopolitan, Cryptotale, Coinspeaker, and MPost. Known for his concise, data-driven reporting, Moses focuses on price analysis, on-chain metrics, and policy developments shaping the global digital asset landscape.
