Bitcoin (BTC), Ethereum (ETH) Lead $1.34 Billion Liquidation Wave Amid Crypto Market Turmoil

The cryptocurrency market faced a dramatic upheaval, with Bitcoin (BTC) and Ethereum (ETH) experiencing massive long position liquidations totaling $1.34 billion. This unprecedented shakeup has intensified market volatility, with overall liquidations surging in magnitude, nearly tripling compared to the previous day.

Market Volatility Surges as Liquidations Hit Record Levels

Fresh data from Coinglass, as of September 23 (Korean time), revealed a total of $1.49 billion in liquidations over the past 24 hours, marking a staggering 183.6% increase from the day before. Of this, long positions accounted for $1.34 billion—an overwhelming 90% of all liquidations—while short positions registered a comparatively modest $144.5 million. This drastic imbalance reflects the fragility of bullish bets in the current market environment.

Ethereum (ETH) Suffers the Largest Liquidation Blow

The fallout has been particularly severe for Ethereum (ETH), which emerged as the most liquidated cryptocurrency during this market upheaval. Suffering a 3.55% decline in value over the last day, Ethereum saw a liquidation total of $409.21 million. Notably, long liquidations dominated, accounting for $378 million, or an eye-popping 92.42% of the total. In contrast, short liquidations were minimal, contributing just $31 million.

Bitcoin (BTC) did not escape unscathed, with the top cryptocurrency experiencing a 1.79% drop in price that led to $249.77 million in liquidations. Similar to Ethereum, long liquidations represented the lion’s share at $231.58 million, while short liquidations remained relatively insignificant at $14.6 million.

Altcoins Experience Widespread Long Liquidation Dominance

Altcoins were not immune to the market turmoil, with many experiencing their own episodes of liquidation dominance, overwhelmingly in long positions. Solana (SOL) was hit particularly hard, witnessing $84.54 million in total liquidations. Of this, $81.5 million—or an astonishing 96.4%—originated from long positions.

Major altcoins, including XRP and Dogecoin (DOGE), followed a similar trajectory. Long liquidations for XRP accounted for 94.16% of its $33.59 million total, while Dogecoin recorded 93.57% dominance of long liquidations from $11.43 million total liquidations. HYPE, a smaller cryptocurrency that recently enjoyed a rally to new highs, fell victim to a significant 7.46% price drop. Its long liquidations amounted to $8.27 million, dwarfing the $1.35 million in short liquidations—a six-fold disparity.

Trading Volume Soars While Open Interest Contracts; Market Sentiment Erodes

The turbulence in the derivatives market has triggered a sharp rise in trading activity, even as open interest—a measure of existing positions—contracted. Over the last 24 hours, trading volumes skyrocketed by 73%, reaching $371.4 billion. Simultaneously, open interest declined by 6.39%, dropping to $205.9 billion, signaling a broad unwinding of leveraged positions.

The widespread liquidations impacted 367,692 traders in a single day, more than double the 180,000 traders affected the day prior. The largest individual liquidation was recorded on OKX's BTC-USDT swap, amounting to $12.74 million—underscoring the scale of losses borne by individual investors.

Amid these developments, investor sentiment continues to sour. The Fear and Greed Index, which tracks market sentiment, slid to 40, indicating a shift toward "Fear" from a neutral stance. Meanwhile, the Relative Strength Index (RSI), used to gauge momentum, dipped to 35, signaling that the market may now be in oversold territory.

Fed-Induced Pressure Drives Market Correction, Heightens Risk

Analysts point to a confluence of factors fueling this dramatic market correction, with profit-taking after a recent rally identified as a critical catalyst for the liquidation cascade. Despite the U.S. Federal Reserve's decision to hold interest rates steady during its September meeting, concern over the long-term economic outlook has caused bullish optimism to falter. This waning momentum has left leveraged long positions increasingly vulnerable to sweeping liquidations.

Market experts caution that deteriorating sentiment—as evidenced by the lurch toward oversold indicators—could amplify investor unease and spark additional short-term selling pressure. If fear continues to dominate the market psyche, these dynamics may hinder swift recovery and leave cryptocurrencies vulnerable to more volatility in the immediate future.

In conclusion, the recent turbulence across the cryptocurrency market serves as a stark reminder of the risks associated with leveraged trading. As Bitcoin, Ethereum, and altcoins grapple with mounting liquidation pressures, investors are left navigating an increasingly uncertain landscape.