Bitcoin News Today: Leverage vs. Volatility: $87.5M Liquidation Exposes Crypto Risks

A major cryptocurrency whale suffered a $87.5 million liquidation on HTX following Bitcoin's (BTC) recent price surge, marking one of the largest single-position liquidations in 2025. The event occurred as BTC surged past $118,000, triggering widespread short liquidations totaling nearly $1 billion in the past 24 hours, according to Coinglass data . The whale's position, reportedly leveraged at 40X, was fully liquidated on HTX, with the exchange accounting for the largest single liquidation during the rally .

The liquidation event coincided with Bitcoin's record-breaking price action, which saw the asset surpass its previous all-time high of $112,000. Over the same period, total network liquidations reached $415 million, with $96.23 million attributed to BTC and $116 million to Ethereum (ETH) MExc.com^[3]. Short positions dominated the liquidation volume, with BTC short liquidations reaching $655.46 million in the 24-hour window as prices pushed above $118,000 . The rapid price movement exposed excessive leverage in short positions, leading to cascading forced closures and further amplifying upward momentum.

The whale's liquidation highlights the risks of high-leverage trading during volatile market conditions. Prominent traders, including James Wynn and @qwatio, had also opened short positions ahead of the rally, with both facing partial or full liquidations . Wynn's position, a 40X leveraged short, was liquidated as BTC failed to retrace from its peak, while @qwatio closed all perpetual futures positions after accumulating $16.72 million in losses . The event underscores the fragility of leveraged positions in a rapidly shifting market.

Market data indicates growing leverage buildup in Bitcoin's derivatives markets. Open interest for BTC futures reached $38 billion, with leverage conditions resembling previous summer cycles that ended in sharp liquidation cascades . K33 Research noted that Bitcoin's perpetual futures open interest surged to a two-year high of $34 billion, with annualized funding rates jumping from 3% to nearly 11% amid stagnant price action . Analysts warn that such imbalances increase the likelihood of forced liquidations during price corrections.

The liquidation event also revealed strategic shifts in trader positioning. A "huge rotation" of 22,400 BTC into Ethereum via Hyperunit pushed ETH to new all-time highs above $4,950, with the ETH/BTC ratio surging above 0.04 . This shift in liquidity from Bitcoin to Ethereum intensified short-term momentum for altcoins but left BTC with a concentrated cluster of leveraged positions near $91,834, where $540 million in long liquidations and $1.6 billion in short liquidations are at risk .

HTX's role in the liquidation highlights the exchange's growing prominence in derivatives trading. The platform reported $290 million in short liquidations in the 24-hour period, with BTC accounting for $96.23 million of the total MExc.com^[3]. While HTX's fee structure and liquidity depth make it a popular choice for leveraged traders, the event underscores the risks of overexposure to single-asset positions.

The broader market remains in a state of flux, with Bitcoin's dominance near 62.6% and futures volumes exceeding $59 billion in the past 24 hours . Despite the liquidation risks, institutional demand for BTC continues to grow, with dormant wallets holding $41.8 million in Bitcoin reactivating as prices surged FxLeaders.com^[2]. However, analysts caution that excessive leverage could lead to further volatility, particularly if BTC fails to sustain its current price levels.