Cryptocurrency Market Undergoes $400 Million Liquidation in a Single Day

The cryptocurrency market witnessed a dramatic $400 million (approximately 560.7 billion Korean won) worth of liquidations over just 24 hours, marking one of the most significant sell-offs in recent weeks. Bitcoin (BTC), which had been maintaining a steady price above $113,000, broke below a critical support level to trade at $111,800, sparking concerns about the short-term stability of the broader crypto market.

Ethereum Leads Liquidations Amid Market Downturn

Data from U.Today (dated the 25th, local time) highlights that Ethereum (ETH) bore the brunt of the liquidations, contributing $178 million (around 249.6 billion Korean won) to the wipeout. Bitcoin (BTC) followed with $57 million (approximately 79.9 billion Korean won) in liquidations, while Solana (SOL) saw $24 million (around 33.6 billion Korean won) erased. Major altcoins like Dogecoin (DOGE) and XRP weren’t spared either, as forced liquidations swept through the market.

The widespread sell-off impacted approximately 128,000 traders, with long positions absorbing the heaviest losses. Long liquidations totaled $333 million (around 466.9 billion Korean won), dwarfing the $73 million (around 102.4 billion Korean won) in short liquidations. This imbalance underscores how highly leveraged bullish bets proved vulnerable during the market’s rapid decline.

Exchanges Grapple with Liquidation Pressures

Crypto exchanges also experienced intense stress during the sell-off. HYPERLIQUID emerged as the hardest-hit platform, reporting $62.5 million (roughly 87.6 billion Korean won) in liquidations. Other major trading venues such as Bybit, Binance, and OKX similarly reported considerable liquidation volumes, indicating that the sell-off was widespread across the ecosystem.

Bitcoin Moves Below Key Technical Indicators

In the midst of these liquidations, Bitcoin’s technical picture turned more alarming. While long positions had accounted for a staggering 95% of total liquidations just prior to the event, Bitcoin slipped below a critical technical indicator – the 50-day Exponential Moving Average (EMA). This signals increased downside risks for the leading cryptocurrency.

Currently, the 200-day EMA at approximately $106,000 has become the next major support level for Bitcoin. Analysts warn that if this level fails to hold, selling pressure could escalate further, potentially dragging Bitcoin toward its psychological support threshold at $100,000.

Trading volume data reveals a pronounced rise in sell-side activity, with subdued buying momentum. Some analysts view this deleveraging event as a mechanism to normalize funding rates and reduce excess optimism in the market. This could, they argue, pave the way for the construction of a stronger foundation for Bitcoin and the broader crypto market to recover in the weeks ahead.

Persistent Short-Term Risks and Market Fragility

While some view this correction as a healthy reset, the short-term outlook remains fraught with risks. Bitcoin’s inability to reclaim the $113,000 level amplifies market fragility. Traders are closely monitoring whether support at $111,000 will hold or if another leg down to $106,000 is imminent.

The ongoing uncertainty has kept the cryptocurrency community on high alert, with investors keeping a keen eye on key support levels and market signals. For now, stabilization appears elusive, and traders will be watching for further clues that could signal a recovery or deeper downside risks.