Leveraged Altcoin Bets Trigger $600M Liquidations as Bitcoin Stands Unscathed

The cryptocurrency market experienced a sharp correction on September 22, 2025, as Ethereum (ETH) and XRP led a selloff that triggered over $600 million in liquidations across leveraged positions. According to data from Coinglass, nearly 220,000 traders were liquidated, with ETH accounting for $184 million of the total, highlighting the disproportionate impact on altcoins compared to Bitcoin’s relatively stable performance. The selloff followed a week of consolidation in the $110,000–$115,000 range for Bitcoin, which retreated to $115,204 but retained a 56% market dominance as altcoins bore the brunt of the decline.

Ethereum’s price dropped 4% to under $3,687, failing to reclaim key resistance levels previously tested in September. XRP, meanwhile, fell below $2.9 after breaching critical $3 support during the weekend, exacerbating losses for long-position holders. The altcoin market saw widespread declines, with tokens like Solana (SOL), Cardano (ADA), and Dogecoin (DOGE) dropping 8–9% amid reports of data breaches and profit-taking in speculative assets. Hype (HYPE) plummeted 8% as Arthur Hayes, former BitMEX co-founder, liquidated holdings, while XRP’s legal uncertainties with the U.S. SEC further pressured sentiment.

Liquidation data revealed a systemic imbalance in leveraged trading. Over $630 million in positions were liquidated within 24 hours, with longs accounting for 93% of the losses. The largest single liquidation reached $13.7 million in ETH on Binance, underscoring the fragility of over-leveraged positions. Analysts attributed the sell-off to a “long squeeze,” where forced unwinding of bullish bets amplified downward momentum. Open interest for ETH and XRP futures dropped by 2–6%, signaling a retreat of speculative capital.

Macro factors compounded the volatility. The Federal Reserve’s hawkish stance, with Chair Jerome Powell hinting at a potential Q3 rate hike, pushed U.S. 10-year Treasury yields above 5% and strengthened the dollar index (DXY) to 106.7. This reduced the appeal of risk-on assets like crypto, while geopolitical tensions in the South China Sea added to risk premiums. Bitcoin’s resilience, supported by ETF inflows and stable funding rates, contrasted with the altcoin rout, reinforcing its role as a market anchor.

Market participants remain divided on the implications. Ryan Lee of Bitget noted that corrections in tokens like Fartcoin (FART) and Pump.fun (PUMP) reflect isolated momentum shifts rather than systemic weakness, with FART testing its 100-day EMA and JUP losing 200-day support. Meanwhile, long-term on-chain metrics suggest Bitcoin remains in a bull cycle, with over 70% of its supply untouched in six months. However, short-term volatility is expected to persist as leveraged traders adjust positions and regulatory developments, including the EU’s MiCA framework, gain clarity.

The selloff underscores the growing influence of derivatives markets in crypto price dynamics. Perpetual futures now dominate trading volumes, with leveraged bets exacerbating short-term swings. As institutional players await reduced volatility, retail investors have shown “buy the dip” sentiment on social platforms, though caution is advised given the elevated leverage risks. The upcoming launch of Coinbase’s Mag7 + Crypto Equity Index Futures, combining tech stocks and crypto ETFs, may further diversify exposure but does not address the current fragility in leveraged altcoin trading.

Source: [1] Altcoin Wipeout: ETH, XRP Selloff Triggers $600 Million in … (https://cryptopotato.com/altcoin-wipeout-eth-xrp-selloff-triggers-600-million-in-liquidations/) [2] BTC, ETH, XRP News: $600M Bullish Bets Liquidated as Bitcoin (https://www.coindesk.com/markets/2025/08/01/usd600m-bullish-bets-liquidated-as-bitcoin-drops-to-usd115k-doge-sol-xrp-fall-6) [3] Bitcoin, XRP Crash Triggers $600M Liquidations in Crypto Market (https://coinetech.com/bitcoin-xrp-crash-triggers-600m-liquidations-in-crypto-market/) [4] Crypto Crash Wipes Out $700M as ETH and XRP Lead … (https://coinpedia.org/news/crypto-crash-wipes-out-700m-as-eth-and-xrp-lead-long-squeeze-liquidations/) [10] Coinbase Equity Futures to Blend Mag 7 Tech Stocks With Crypto … (https://www.coindesk.com/markets/2025/09/02/new-coinbase-futures-blend-mag-7-tech-stocks-with-crypto-etfs)