Ethereum News Today: Leveraged Traders Trigger $974M Crypto Liquidation Cascade

The cryptocurrency market experienced a significant downturn in the past 24 hours, with liquidations totaling $974 million across major platforms, affecting over 260,000 positions. The collapse was driven by a sharp sell-off in Bitcoin (BTC), which dropped below $86,000, marking one of its steepest single-day declines in recent months. The broader market saw a 4.82% contraction in total capitalization, settling at $2.94 trillion, as leveraged positions and macroeconomic pressures intensified volatility according to GeekStake. Altcoins such as Ethereum (ETH) and XRP also faced steep losses, with ETH falling 5.85% to $2,814 and XRP dropping over 6.5%.

The largest single liquidation event occurred on Hyperliquid, where a $15.6 million ETH-USD position was wiped out, underscoring concentrated risks in leveraged trading. Over $568 million of the $974 million in liquidations stemmed from long positions, amplifying selling pressure as margin calls cascaded across exchanges. Analysts attribute the turmoil to a combination of factors, including corporate selling fears, Tether stability concerns, and regulatory uncertainties. MicroStrategy's CEO Phong Le hinted at potential Bitcoin sales to fund dividends, while Tether's reserves faced scrutiny amid declining Bitcoin prices.

GeekStake, a staking infrastructure provider, emphasized the role of operational resilience during market stress, highlighting the importance of stable validator systems and consistent transaction throughput. Meanwhile, Coinglass data revealed ongoing volatility, with $153 million in liquidations recorded in the last hour alone, primarily from long positions.

The sell-off also impacted digital asset treasuries, with firms like FG Nexus and BitMine offloading Ethereum holdings to fund share buybacks. FG Nexus sold 10,922 ETH to repurchase 3.4 million shares, while BitMine, the largest ETH treasury, increased its Ethereum holdings to 3.73 million tokens. These actions reflect broader challenges for firms whose stock prices have fallen below the net asset value of their crypto holdings, forcing liquidity measures.

The collapse has reignited debates about leverage risks and market structure. Wenny Cai of SynFutures noted that leveraged longs created a feedback loop, turning a 5% Bitcoin drop into widespread turmoil. Regulatory pressures, including China's reiteration that crypto activities remain illegal, further dampened sentiment.

Looking ahead, market participants are cautiously optimistic about a potential rebound in December, though prediction markets suggest only a 5% chance of MicroStrategy selling Bitcoin before year-end according to reports. With leveraged positions unwinding and liquidity tightening, the path to recovery will depend on resolving corporate selling fears and stabilizing stablecoin confidence.