Hyperliquid Surpasses $464 Million in Daily Liquidations Amid Crypto Market Downturn

• Hyperliquid reported $464.44 million in total crypto liquidations in 24 hours, driven by a sharp decline in major cryptocurrencies like Bitcoin and Ethereum.
• Over $150 million in leveraged long positions were liquidated in just one hour, with Hyperliquid handling the largest single $3.63 million order according to reports.
• The liquidations followed the largest single-day outflow from U.S. spot Bitcoin ETFs, totaling $486 million on January 7.

The recent volatility highlights the risks of leveraged trading in the crypto market, particularly during sharp price movements. A prominent Hyperliquid trader, James Wynn, suffered 12 liquidations in 24 hours during the market downturn, emphasizing the potential consequences of high leverage.

The broader market environment was marked by a flash crash in Bitcoin, which briefly dipped below $90,000. This event led to the liquidation of approximately $128 million in long positions and was accompanied by a broader sell-off in crypto markets.

What factors contributed to the liquidation wave?

The liquidation wave was triggered by a combination of factors including a sharp decline in major cryptocurrencies, significant outflows from U.S. spot Bitcoin ETFs, and leveraged trading activity. Coinglass data showed that Bitcoin’s price drop led to the liquidation of roughly $128 million in long positions, underscoring the sensitivity of leveraged positions to price volatility.

The market sell-off followed $486 million in net redemptions from U.S. spot Bitcoin ETFs on the prior day, marking the largest single-day outflow since November 20. Analysts suggested that institutional hedging and dealer activity had contributed to a tight trading range for Bitcoin, limiting its ability to break above $100,000.

How has Hyperliquid performed in 2025?

Hyperliquid experienced significant growth in 2025, with its user base expanding from 300,000 in 2024 to over 1.4 million by the end of 2025. The platform also saw increased trading activity, with daily trading volume reaching $32 billion during high-activity sessions.

The ecosystem expansion was driven by a permissionless design and community engagement, with hundreds of development teams and dozens of regional communities contributing to adoption and education efforts according to reports. Product innovations such as HyperEVM with HyperCore integration and native staking utilities further enhanced the platform's usability and composability.

What does the current market environment mean for investors?

The current market environment reflects a late-cycle dynamic where price consolidation and increased loss realization among long-term holders indicate growing exhaustion according to analysts. Despite positive ETF inflows in January 2026, onchain indicators suggest internal market fatigue, with Bitcoin's realized capitalization turning negative in late December.

Analysts emphasize that while ETF inflows may provide price support, sustained upside will require renewed onchain capital formation. The market appears to be supported by external inflows but still wrestling with internal fatigue, requiring patience and careful risk management for investors.