Crypto Market Turmoil: $1.2 Billion in Liquidations Amidst Severe Correction

The cryptocurrency market has experienced a dramatic wave of liquidations, triggered by an unexpected and intensified market correction that caught many traders off guard.

In the past 24 hours alone, forced liquidations in the digital asset market skyrocketed, reaching a staggering total of $1.2 billion — approximately KRW 1.7 trillion — as reported by CoinGlass on November 17. Bitcoin (BTC) suffered the heaviest blow, with liquidated long positions amounting to $432.35 million (around KRW 615.45 billion), surpassing all other digital assets. Ethereum (ETH) followed suit, recording losses of $269.51 million (roughly KRW 383.65 billion) in liquidated long positions.

Other prominent cryptocurrencies were not spared from the fallout. Solana (SOL) endured liquidations amounting to $89.64 million (approximately KRW 127.6 billion). Additionally, XRP and HYPE saw individual position losses rise to roughly $27 million (around KRW 3.84 billion). In total, major altcoins experienced combined liquidations exceeding $100 million (about KRW 142.3 billion), underscoring the broad scope of the market correction.

Deepening in Historical Liquidation Levels

This event has marked one of the most severe corrections in recent crypto market history. On a single day, the market recorded an unprecedented liquidation volume of $19 billion (an estimated KRW 27 trillion). Analysts point to a prevailing sense of excessive optimism and overly leveraged positions as key factors behind this sudden plunge.

Over 300,000 traders were ensnared by this wave of liquidations, with those holding leveraged long positions bearing the brunt of the losses. Data reveals that long position liquidations alone accounted for an immense $916.76 million (approximately KRW 1.305 trillion), which constituted more than half of the total liquidation volume.

Do Liquidations Reflect True Financial Losses?

Despite the jaw-dropping figures, financial experts caution against interpreting liquidation data as a direct indicator of actual monetary losses. Udi Wertheimer, a seasoned Bitcoin developer, clarified that liquidations represent the forced closure of positions rather than an absolute loss of all funds. “These figures reflect leverage exposure, not the total amount of money lost,” Wertheimer explained.

Patrick Heusser, a strategist at Sentora, supported this sentiment, estimating that real losses amounted to around $100 million, considering an average leverage ratio of 10x across traders. He explained further, “The sharp drop in open interest indicates a de-leveraging process within the market, rather than a one-to-one outflow of capital.” Such insights emphasize the distinction between high liquidation values and the actual financial impact on market participants.

Gold’s Resurgence as a Safe Haven

Amid Bitcoin’s steep decline and the chaos in the cryptocurrency market, gold demonstrated its enduring appeal as a safe-haven asset. The price of gold surged to record highs, marking a nine-week consecutive rally — a rare event that has occurred only five times in the last half-century.

For the first time in history, gold’s market capitalization soared past $30 trillion (equivalent to approximately KRW 4 quadrillion). This milestone underscores investors’ growing preference for traditional avenues of safety during periods of elevated market volatility.

The contrasting trajectories of gold and cryptocurrencies highlight the divergent behaviors of these asset classes during times of financial turmoil. As digital assets face dramatic selloffs, many investors are opting to park their wealth in historically reliable options like gold, further widening the gap between the volatile digital landscape and traditional safe-haven investments.

Conclusion: Lessons from the Market Shakeup

The recent sharp correction and massive liquidations serve as a stark reminder of the risks inherent in the cryptocurrency market, particularly for those engaging in highly leveraged trading strategies. While the impressive headline liquidation figures draw attention, experts encourage traders to better understand the dynamics of margin trading and leverage to avoid steep losses.

At the same time, the renewed surge in gold prices highlights the timeless appeal of traditional safe-haven assets, especially during times of overarching market uncertainty. As digital assets continue to evolve and mature, market participants are likely to weigh the risks and rewards these new investment opportunities present, especially when juxtaposed against well-established financial vehicles like gold.

Investors should remain cautious and ensure they have a comprehensive understanding of market movements to navigate this ever-evolving financial ecosystem, where fortunes can shift as sharply as the markets themselves.