Digital Asset Futures Market Experiences $417.77 Million in Liquidations as Bitcoin and Altcoins Show Diverging Trends

The digital asset derivatives market saw significant turbulence at the start of October, with liquidations surging to $417.77 million (approximately KRW 588.3 billion) in the span of 24 hours. Despite the optimistic narrative around “Uptober,” the uptick in liquidations revealed a stark contrast in market dynamics, as Bitcoin (BTC) and several altcoins experienced divergent liquidation trends. While long (buy) positions dominated overall losses, key assets, including BTC and HyperLiquid (HYPE), recorded substantial short (sell) liquidations, reflecting mixed signals in market sentiment.

A Surge in Liquidations Marks a Volatile Kickoff to October

Data from Coinglass indicated that global liquidations climbed 29.77% from the previous day, highlighting increased volatility. Out of the $417.77 million total liquidations on October 1, $233.93 million (KRW 317.1 billion) came from long positions, while $183.83 million (KRW 249 billion) stemmed from short positions, emphasizing the prevailing pressure on long-side traders.

This heightened liquidation activity points to increasingly aggressive leveraged trades, as investors speculated on price rebounds following September’s subdued performance. However, the market appears to be undergoing a partial correction with no definitive directional momentum.

Ethereum Leads Liquidation Totals

Ethereum (ETH) led the pack, recording liquidation volumes of $85.75 million (KRW 120.7 billion) as its price slipped 0.88% compared to the previous day. Notably, $53.25 million (KRW 74.9 billion), or 62.09% of Ethereum's total liquidations, came from long positions. This underscores the impact of short-term leveraged bets on a presumed price recovery that failed to materialize.

Bitcoin (BTC), with liquidation volumes of $45.87 million (KRW 64.6 billion), demonstrated a distinct pattern compared to most digital assets. Unlike Ethereum and other altcoins, BTC saw higher short liquidations, totaling $25.82 million (KRW 36.3 billion), compared to $19.94 million (KRW 28.1 billion) from long positions. This deviation reflects varying market expectations for Bitcoin, particularly as traders continue to hedge against uncertainty in broader crypto markets.

Altcoins Hit Hard by Long Liquidations

Among altcoins, newer assets such as Plasma (XPL) and Astar (ASTER) attracted significant attention due to steep liquidation volumes. XPL suffered a 13.41% price drop, translating to $39.8 million (KRW 56 billion) in total liquidations, with $25.93 million (KRW 36.5 billion) concentrated in longs. Similarly, ASTER saw a sharp 17.27% decline, triggering $22.16 million (KRW 31.2 billion) in liquidations, including $17.23 million (KRW 24.3 billion) from long positions.

These newer assets had seen significant streaks of upward momentum prior to their corrections, leaving long-traders disproportionately exposed to price downturns. Established altcoins, including Solana (SOL), XRP (XRP), and Dogecoin (DOGE), also witnessed elevated long-side liquidations, further underscoring the broader market’s vulnerability to sudden price shifts.

Short-Side Liquidation Dominance in Select Assets

Amid the heavy long-side pressure, certain assets exhibited greater short-side liquidation activity. HyperLiquid (HYPE), which faced intense selling pressure after peaking at $59, saw a reversal in liquidation trends. On October 1, short liquidations for HYPE surged to $3.48 million, more than doubling its long liquidation total of $1.65 million.

Other assets, including Binance Coin (BNB), Avalanche (AVAX), and Cardano (ADA), also experienced higher short liquidations compared to long. This indicates that traders in these markets were forced to abandon bearish positions as prices briefly recovered.

Macro Market Trends Signal Overheated Positions

The broader market exhibited signs of cooling despite the liquidation spike. Total 24-hour trading volume across digital asset markets fell 1.46% to $257.7 billion (KRW 363 trillion), while open interest (OI) dipped 1.81% to $200.2 billion (KRW 282 trillion). This decline suggests diminished investor activity, even as the elevated liquidation totals reflect overheating in leveraged trades.

Over 153,262 traders faced liquidations during the day, with the largest single liquidation—a staggering $8.94 million (KRW 12.6 billion)—occurring in the ENA-USDT pair on Binance exchange. The dissonance between trading volumes and liquidation activity highlights the precariousness of highly-leveraged positions in a volatile market environment.

Market Sentiment Holds Neutral Amid Rising Volatility

Despite heightened volatility, broader market sentiment remained neutral. The Fear and Greed Index held steady at 43, reflecting a balanced outlook among investors. Similarly, the Relative Strength Index (RSI) for key assets hovered at 47.5, signaling indecision.

Market analysts attribute the spike in liquidations to investors placing speculative bets on a potential October recovery—a phenomenon commonly associated with “Uptober.” However, the divergence in liquidation patterns among top assets like BTC and ETH suggests uncertainty, with no clear directional consensus emerging.

Diverging Liquidation Trends in Altcoins Drive Portfolio Diversification

Another key takeaway is the disparate liquidation dominance observed across altcoins. The pronounced long liquidations in assets like XPL and ASTER contrast with the short-side dominance noted for HYPE and ADA. These shifts may push investors to adopt more diversified short-term strategies, reducing reliance on single-direction bets to mitigate risk.

Conclusion

The $417.77 million liquidation event on October 1 highlights the crypto market’s inherent volatility and the risks associated with high leverage. Ethereum’s leadership in long liquidations, Bitcoin’s unusual short liquidation dominance, and the varying pressures on altcoins all underscore the complexity of a market navigating uncertain macroeconomic conditions.

As speculative activity continues to intensify, traders face an increasingly precarious environment where strategic positioning across assets, informed risk management, and anticipation of broader market corrections will be essential for navigating volatility in the months ahead.