Bitcoin News Today: Underreported $600M Crypto Liquidations Expose Leverage Risks in Fragile Market

A wave of crypto liquidations exceeding $600 million swept through the market on October 7, 2025, as Bitcoin retreated from its all-time high amid renewed volatility. According to data from Coinglass, leveraged positions across major exchanges like Binance, OKX, and Bybit were heavily impacted, with Bitcoin and Ethereum accounting for nearly 60% of total liquidations. The sharp price correction, which saw Bitcoin fall from $125,000 to $121,000, triggered significant losses for long-position holders, particularly in the $120,500–$116,000 support zone .

The liquidation event was driven by a technical correction following Bitcoin's brief surge above $125,000, a level that coincided with the upper boundary of a multi-month ascending channel. Traders' overextended leverage, exacerbated by last week's euphoric rally, amplified the downturn. Bybit CEO Ben Zhou noted that the exchange alone reported $2.1 billion in liquidations, far exceeding Coinglass' $333 million estimate, attributing the discrepancy to API limitations on real-time data reporting . This highlights potential underreporting of liquidation figures across platforms, underscoring market fragility.

Ethereum fared relatively better, maintaining resilience near $4,480 as institutional accumulation offset broader weakness. However, altcoins like Solana, XRP, and AVAX fell 3–5%, reflecting reduced liquidity and risk-off sentiment. The Altcoin Season Index at 16 indicates the market remains in "Bitcoin Season," with open interest rising 14% to $121.6 billion as traders maintained aggressive leveraged bets .

Geopolitical factors also influenced market dynamics. A temporary pause on U.S. tariffs on Mexico and Canada briefly lifted Bitcoin above $100,000, but the relief was short-lived. President Trump's tempered stance on U.S.-China trade tensions and comments supporting Federal Reserve Chair Jerome Powell contributed to mixed sentiment, with Bitcoin ultimately settling at $98,436 . Meanwhile, U.S. Bitcoin ETFs recorded $936 million in net inflows, the highest since Trump's re-election, signaling institutional confidence despite price volatility .

The correction has exposed vulnerabilities in leveraged trading strategies. Data shows that 194,888 traders were liquidated, with long positions accounting for $310.33 million in losses. Bitcoin, Ethereum, and Dogecoin were the largest contributors to liquidations, totaling $163.29 million, $117.13 million, and $29.56 million, respectively . Bybit's admission of underreported liquidations further underscores the risks of high leverage in low-liquidity environments, particularly for small-cap altcoins.

Market analysts suggest the current pullback could serve as a reset for the "Uptober" rally. Bitcoin's consolidation near $121,000, combined with stablecoin inflows and institutional accumulation, indicates a potential shift from euphoric to cautious optimism. However, sustained weakness below $110,000 could trigger deeper corrections, testing historical support levels. The broader market's cooldown, marked by a decline in Bitcoin dominance to 53.4% and normalized funding rates, reflects a broader de-risking trend among traders .