Bitcoin News Today: Excessive Leverage Sparks $1.35B Crypto Liquidations, Experts Warn of Routine Collapse

The cryptocurrency market is reeling from a wave of liquidations, with $1.357 billion wiped out across the entire network in the past 24 hours, per Coinglass data. Over 277,000 traders were liquidated, driven largely by long positions-accounting for $11.86 billion of the total-amid a 3.7% decline in Bitcoin and a 4.4% drop in Ethereum according to market analysis. The largest single liquidation, a $96.5 million BTC-USD position on Hyperliquid, underscored the fragility of leveraged trading in a market increasingly prone to extreme volatility as reported.

Analysts point to excessive leverage and thin liquidity as primary culprits. Over the past seven days, cumulative liquidations have surpassed $5 billion, with leveraged positions now hypersensitive to even minor price swings. A 2% move can trigger cascading liquidations, creating a self-reinforcing cycle of selling and further price declines according to industry experts. The Kobeissi Letter noted that the market has shed $1.2 trillion in value since October 6, with leverage remaining elevated despite the downturn based on data.

Bitcoin ETFs, once a pillar of bullish momentum, have seen $2.96 billion in November outflows, led by BlackRock's $523 million redemptions-the largest single-day outflow in its history according to Cointelegraph. Ethereum ETFs also suffered $689 million in outflows, reflecting broader investor caution as reported. CoinShares' James Butterfill attributed the exodus to "monetary policy uncertainty and crypto-native whale sellers," with assets under management in digital asset ETPs falling 27% from October peaks according to Seeking Alpha.

The selloff has pushed Ethereum below $3,000 for the first time since July, with analysts warning that a breakout above $3,200 could trigger $890 million in short liquidations, while a drop below $3,000 risks $420 million in long liquidations as detailed in recent reports. Bitcoin, which briefly fell below $90,000, now trades near $91,000 but remains 40% below its October highs according to market data.

Hyperliquid's native token, HYPE, has shown surprising resilience, rising 6% in 24 hours despite the platform's role in the $96.5 million liquidation. Whale accumulation, rising open interest, and positive funding rates suggest a potential rebound to $48–$54 if the $40–$41 resistance level is breached according to investment analysis.

With leverage still rampant and institutional outflows persisting, experts warn that large-scale liquidations could become routine. "Excessive leverage has created a hypersensitive market", said The Kobeissi Letter, noting that unless leverage resets or liquidity stabilizes, traders will face continued volatility as stated in the report. Meanwhile, global stimulus measures-such as Japan's $110 billion and China's $1.4 trillion packages-offer a potential lifeline for a nascent altseason in 2025 according to price analysis.

For now, the market remains in a precarious balance, with every 2% price swing threatening to reignite the liquidation cycle.

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