The cryptocurrency market witnessed turbulent trading hours today, with Bitcoin (BTC) and Ethereum (ETH) experiencing sharp price declines, triggering $300 million in liquidations in the past 4 hours across various exchanges. This sudden downturn has left many traders reeling, particularly those holding highly leveraged long positions.
As per Coinglass data, the past 24-hour liquidation currently sits at $471.66 million, out of which $300 million was wiped out in the past 4 hours alone. This record liquidation marks nearly $286 million in long positions and roughly $14.75 million in short positions.
Source: Coinglass
This data reveals that a vast majority of the liquidated positions were leveraged long bets, meaning traders were betting on continued price increases. As prices tumbled, long positions were automatically closed by exchanges on stop-loss (SL) orders or on liquidation prices for respective traders, creating a cascading effect that accelerated the market’s descent.
In the past 4 hours, Ethereum long positions accounted for a significant portion of the losses, which are usually dominated by Bitcoin. The significant sell-off, which began during midday US trading hours, saw Bitcoin briefly dip to $102,400 on leading exchanges, while Ethereum followed suit with a more substantial drop of over 4% to $2,380 hours ago.
Market analysts point to a confluence of factors contributing to the volatility, including mounting geopolitical tensions in the Middle East and lingering macroeconomic uncertainties. Reports suggest that initial panic was exacerbated by threats of new tariffs from Donald Trump, which sparked a broader “risk-off” sentiment across global financial markets, with cryptocurrencies bearing the brunt.
While some market participants express concern about the immediate future, others view this as a necessary deleveraging event, potentially paving the way for healthier market growth. However, the current liquidation data underscores inherent risks associated with leveraged trading in volatile cryptocurrency markets where traders take huge losses.
