Ethereum Fuels Market Turbulence as $346.8 Million in Crypto Derivatives Liquidated in 24 Hours

The global cryptocurrency derivatives market witnessed a dramatic $346.8 million (approximately 496 billion won) in liquidations over the past 24 hours, highlighting the heightened volatility in digital asset trading. Short sellers bore the brunt of these losses as major cryptocurrencies surged in value. Among all assets, Ethereum (ETH) stood out as the centerpiece of this activity, recording the single largest liquidation volume during the period.

Market Liquidations: A Detailed Breakdown

Data from Coinglass provides crucial insights into the liquidation dynamics. Of the $346.8 million total liquidated, long (buy) positions accounted for $86.79 million (around 124 billion won), while short (sell) positions dominated with liquidations totaling $260.01 million (roughly 372 billion won)—approximately 75% of the overall value.

This data illustrates a market-wide uptrend, with gains across almost all top cryptocurrencies, except for XPL, which endured a notable 16.03% drop while its peers ascended. This disparity underscores the diverse behavior of individual digital assets during high-volatility periods.

Ethereum: The Epicenter of Liquidations

Ethereum emerged as the leading influence in market liquidations, registering a massive $26.02 million in a single liquidation event for an ETH-USDT pair on the Hyperliquid exchange. This reinforces Ethereum’s dominance as the most leveraged and actively traded crypto asset during the analyzed period.

Meanwhile, Bitcoin (BTC) also saw a marked liquidation of short positions as upward price momentum persisted. Other altcoins such as Solana (SOL), Pump (PUMP), and XPL experienced significant deleveraging of high-risk leveraged positions. These activities reflect the market’s intense focus on Ethereum and Bitcoin, while altcoins continue to offer both risks and opportunities during high-volatility cycles.

Avalanche (AVAX) Defies the Norm

Avalanche (AVAX) bucked the broader trend in a surprising turn of events. Despite a 4.7% daily price increase, the asset saw $3.9 million in long position liquidations. This counterintuitive outcome signals how excessive leverage—even in favorable market conditions—can prompt forced liquidations against directional trends. AVAX’s behavior underscores the risks of over-leveraging, even in bullish scenarios.

Implications of a Volatile Market

The current liquidation trend demonstrates a significant shakeout of short positions accelerated by a robust market rally, with Ethereum playing a leading role. Bitcoin, in contrast, continues to face resistance near critical levels, as its upward momentum appeared somewhat constrained. This suggests a consolidation phase and the testing of support zones rather than the establishment of a confirmed short-term bottom.

Further analysis of Binance’s Bitcoin liquidation heatmap shows that BTC encountered heavy selling pressure and short liquidations when it approached the $11,600 level. The price subsequently retraced to the $11,100 region, a historically significant threshold for liquidation activity. The $11,000 level remains a key market marker, potentially acting as a short-term support zone for Bitcoin.

Record Derivatives Market Activity

Alongside these liquidations, the broader derivatives market reflected a surge in activity. Total trading volume rose to $184.3 billion (approximately 263 trillion won), representing a 26.83% increase from the previous day. Open interest also edged higher to $199.5 billion (around 285 trillion won), up by 2.40%, signaling continued investor engagement in derivatives trading.

Investor sentiment saw a noticeable shift, as measured by Alternative’s Fear & Greed Index. The index climbed to a neutral 50 points, a stark improvement from the preceding day’s “fear” level of 37 points. Comparatively, last week’s reading was 45 points, while last month’s stood at 39. This improvement reflects recovering confidence amidst lingering caution, marking a transition toward a more optimistic outlook in the derivatives market.

The Bigger Picture

These developments in the cryptocurrency derivatives market emphasize its volatile yet dynamic nature. The sharp liquidation of short positions highlights the risks of over-leveraged strategies, particularly during market rallies, with Ethereum acting as the primary catalyst.

As investor sentiment improves and derivatives activity surges, the crypto market continues to walk a fine line between opportunity and risk. Ethereum's central role in liquidations reinforces its status as a key bellwether for digital asset performance, while Bitcoin remains a crucial focus as traders track its responses to historical support and resistance levels. The evolving market dynamics call for a strategic and measured approach as participants navigate the exciting yet unpredictable world of crypto.