Over $1 Billion in Crypto Liquidations as Market Stagnation Leaves Leveraged Positions Vulnerable

The cryptocurrency market has endured a turbulent 24 hours with over $1 billion in leveraged positions liquidated amid minimal price fluctuations. Traders were caught off guard as both long and short positions faced widespread liquidation during range-bound trading conditions. This sudden volatility left many investors frustrated, with some lamenting that staying on the sidelines may have been a more prudent choice.

Bitcoin (BTC) and Ethereum (ETH) were hit hardest by the liquidation frenzy, jointly accounting for nearly 70% of the total volume across two consecutive sessions. The market turmoil underscores the risks associated with leveraging during periods of low price volatility.

$759.72 Million Liquidated in 24 Hours: Long Positions Suffer Most

Data published by Coinglass on October 22 reveals that the total liquidation volume over the prior 24 hours reached $759.72 million (about 1.07 trillion KRW), with long positions constituting 59.4% of these liquidations. Specifically, $451.41 million (roughly 639.5 billion KRW) originated from longs, while $308.31 million (approximately 437 billion KRW) stemmed from short positions.

Bitcoin led the liquidation tally, single-handedly contributing $323.14 million (about 457.8 billion KRW) or 42.5% of the total amount lost by traders. Ethereum followed, accounting for $200.97 million (roughly 284 billion KRW) liquidated during the timeframe. Combined, BTC and ETH represented close to 70% of the liquidation volume.

Altcoins were also swept into the liquidation spiral, with Solana (SOL) and Dogecoin (DOGE) losing $29.02 million (around 411 billion KRW) and $16.09 million (roughly 228 billion KRW), respectively. These significant losses across cryptocurrencies underscore the market-wide impact of the recent turbulence.

Long Positions Overwhelmingly Liquidated Across Diverse Timeframes

The liquidation trend overwhelmingly favored long positions, even when assessing medium- and short-term trading windows. Within a 4-hour window, $135.88 million (approximately 194.3 billion KRW) was liquidated from long positions, eclipsing the comparatively modest $22.43 million (roughly 32.1 billion KRW) lost to short liquidations. Shorter-term data mirrors this pattern, with $2.53 million (around 36 billion KRW) lost in long liquidations over a 1-hour period, compared to $2 million (approximately 29 billion KRW) in shorts.

The marked skew towards long position liquidations points to a pronounced bearish bias in the market. Moreover, the absence of signs signaling a short-term rebound further confirms a technically negative trend.

Retail Traders Bear the Brunt: Over 186,000 Accounts Liquidated

Retail investors were disproportionately impacted during the liquidation spree, with a staggering 186,022 trader accounts closed. The largest single liquidation event occurred on the BTC-USD trading pair at HyperLiquid, wiping out a massive $14.45 million (nearly 20.7 billion KRW) in one fell swoop.

These extensive losses serve as a stark reminder of the dangers retail traders face when engaging in leveraged trading during uncertain market conditions.

Trading Activity Jumps Amid Liquidations, Yet Open Interest Drops

The day’s liquidations were accompanied by a notable 73.80% spike in liquidation volume alongside a sharp increase in trading activity. Total trading volumes reached $382.2 billion (approximately 546 trillion KRW), representing a 42.46% rise compared to the previous day.

However, open interest (OI)—a key metric indicating the number of active leveraged positions—declined by 2.57% to $147.8 billion (around 210 trillion KRW). The drop in OI alongside higher trading activity clearly reflects mass deleveraging as traders scrambled to cover losses and reduce risk exposure.

Fear Grips the Market Amid Heightened Risk-Off Sentiment

Market sentiment has taken a significant hit following the liquidation spree. The Fear & Greed Index dropped to a concerning level of 29, categorizing the market firmly within the "Fear" zone. Additionally, the Relative Strength Index (RSI) has dipped to 44.25, inching closer to oversold territory.

Traders are now adopting a risk-off approach, bracing for further uncertainty in the absence of definitive macroeconomic catalysts or policy changes. Until clarity emerges, elevated volatility and lower leverage levels are likely to define the market landscape.

Market participants are keeping a watchful eye on external events and economic indicators, which could steer prices in a new direction. Until then, the cautious mood and reduced activity may remain the status quo.