TLDR
- Cryptocurrency liquidations reached $1.8 billion in 24 hours, the largest long position wipeout of 2025
- Over 370,000 traders were liquidated as Bitcoin dropped below $112,000 and Ethereum fell under $4,150
- Crypto market cap lost $150 billion, falling to $3.95 trillion as altcoins faced broad selling pressure
- Ethereum liquidations topped $500 million, more than double Bitcoin’s long position liquidations
- Options traders are buying puts and positioning for further September downside despite bullish long-term outlook
Cryptocurrency markets suffered their worst liquidation event of 2025 on Monday as overleveraged positions triggered a massive selloff. Nearly $2 billion in trader positions were wiped out within 24 hours.
More than 370,000 traders saw their positions liquidated, totaling $1.8 billion according to CoinGlass data. The liquidations primarily hit long positions betting on higher Bitcoin and Ethereum prices.
Bitcoin fell below $112,000 on major exchanges while Ethereum dropped under $4,150 during the rout. The decline marked Ethereum’s biggest pullback since mid-August as the broader market faced intense selling pressure.
The cryptocurrency market capitalization shed over $150 billion, dropping to a two-week low of $3.95 trillion. Altcoins experienced widespread declines alongside the major digital assets.
Ethereum positions faced the heaviest liquidations at over $500 million, more than double the liquidations seen in Bitcoin long positions. This imbalance highlighted excessive leverage in altcoin markets compared to Bitcoin.
Leverage Imbalance Triggers Cascade Effect
Real Vision founder Raoul Pal described the pattern as typical market behavior where traders get overleveraged ahead of expected breakouts. When initial attempts fail, widespread liquidations occur before actual breakouts happen.
Market researcher “Bull Theory” blamed the massive flush on excessive altcoin leverage compared to Bitcoin. The imbalance created conditions where one sharp downward move could trigger cascading liquidations across multiple assets.
CoinGlass confirmed Monday’s event as the largest long liquidation of 2025. Similar liquidation events occurred in late February, early April, and early August when markets lost hundreds of billions over short periods.
Nassar Achkar from CoinW exchange suggested the selloff represented a near-term adjustment rather than a fundamental shift. He pointed to supportive monetary policy as a continued tailwind for risk assets.
IG market analyst Tony Sycamore noted Bitcoin hasn’t correlated with tech stocks or gold recently due to technical factors. He expects Bitcoin could test support around $105,000 to $100,000, including the 200-day moving average at $103,700.
Options Markets Price in Further Weakness
Despite the massive liquidations, implied volatility remained relatively muted according to GreeksLive chief researcher Adam Chu. However, put-buying activity increased after the crash as traders positioned for continued declines.
Sean Dawson from options platform Derive noted heightened demand for put options as fears of continued downward price action worried markets. This activity suggests traders are pricing in further near-term weakness.
Max Shannon from Bitwise Europe observed that one-week and one-month put-call delta skew reached its highest level since early August. The metric indicates increased put-buying for downside protection among options traders.
The bearish positioning may reflect sell-the-news dynamics following the Federal Reserve’s quarter-point rate cut on September 17. Traditional assets like the S&P 500 and gold have outperformed crypto since late August.
Bitcoin has fallen in eight of the past 13 September months but remains up approximately 4% for the current month. The cryptocurrency typically performs better in October based on historical data.
Despite near-term bearishness, options positioning for the next three to six months remains bullish according to multiple analysts. Market makers are net short gamma in Ethereum, which could force spot purchases if prices move upward.
The liquidation event found temporary support levels as major cryptocurrencies stabilized following Monday’s sharp decline.
