Leverage and Macro Uncertainty Fuel $1.5B Crypto Liquidation Wave

In the last 24 hours, global crypto markets experienced over $1.5 billion in liquidations, driven primarily by leveraged long positions as volatility intensified across major assets. Ether (ETH) and Dogecoin (DOGE) led the selloff, with ETH dropping 9% to $4,075 and DOGE declining more than 10% to $0.2403. Bitcoin (BTC), the largest asset by market value, fell nearly 3% to $111,998 amid widespread liquidation of bullish bets. Over 407,000 traders saw positions closed forcibly during the period, marking the highest liquidation volume in recent months.

Derivatives markets remain a focal point of risk, with open interest in crypto futures surpassing $220 billion as of September 2025, according to Coinglass data. This figure highlights the growing concentration of leveraged positions, particularly in Bitcoin and altcoins, which could amplify liquidation cascades during sharp price swings. Analysts note that derivatives trading volumes now exceed spot trading by a factor of eight to ten for Bitcoin perpetual futures, underscoring the dominance of speculative positioning.

The liquidation event coincided with heightened macroeconomic uncertainty, despite the Federal Reserve’s recent rate cut. Nassar Achkar, chief strategy officer at CoinW, emphasized that "upcoming economic data and Fed signals will be critical in determining market trajectories." Investors are closely monitoring U.S. PMI data, jobless claims, and Federal Reserve Chair Jerome Powell’s speech for clues on monetary policy direction. Meanwhile, Coinglass highlighted that Bitcoin’s current price level is surrounded by clusters of high-leverage long and short positions, which could trigger further volatility if breached.

Historical patterns suggest large long liquidations often signal panic bottoms, while short liquidations may precede squeezes. However, the current environment reflects a mix of both, with altcoins like Solana (SOL), Cardano (ADA), and BNB (BNB) also experiencing double-digit declines. Coinglass data further indicated that if Bitcoin were to fall to $104,500, cumulative long liquidations could exceed $10 billion, while a rally above $124,000 could trigger over $5.5 billion in short position losses.

Traders are advised to exercise caution amid overleveraged conditions. Analyst Luckshury noted that derivatives trading effectively pits participants against exchanges, requiring strategies to identify liquidation-prone price zones. Pairing liquidation data with open interest and funding rate metrics can help mitigate risks in markets prone to sudden flushes or rallies. As the September derivatives cycle progresses, the interplay between macroeconomic signals and leveraged positioning will remain a key determinant of market stability.

Source: [1] Why September 2025 Could Trigger Record Liquidations (https://beincrypto.com/september-could-face-new-liquidation-record/) [2] Ether, Dogecoin Lead $1.5B Liquidation Wipeout as Bitcoin (https://www.coindesk.com/markets/2025/09/22/ether-dogecoin-lead-usd1-5b-liquidation-wipeout-as-bitcoin-slips-below-usd112k)