Crypto Markets Face $675.8 Million Liquidation Wave

Crypto markets experienced a significant downturn late Monday, with long traders facing liquidations totaling over $406 million in a 24-hour period. This wave of profit-taking and risk-off trading resulted in an additional $269 million in losses from short-side positions, bringing the total liquidation figure to $675.8 million. This marked one of the heaviest wipeouts since April, indicating a major shift in market sentiment.

The most substantial impact was felt by bitcoin longs, which saw over $333 million in forced closures. Ether (ETH) followed with $113 million in liquidations, while XRP experienced $36 million in losses. Solana’s SOL and dogecoin also faced significant setbacks, each shedding around $14 million. Dogecoin, in particular, was the worst-performing major cryptocurrency, dropping over 7.6% as speculative enthusiasm waned. Bitcoin and ether also saw declines, with BTC falling 3.1% and ETH dropping 2.6%, following a nearly week-long rally.

The largest single liquidation event involved a $98.1 million BTC/USDT long position on Binance, highlighting the magnitude of the market correction. Despite bitcoin trading near record highs, some market participants are exercising caution. Derivative flows indicate that traders are not rushing to chase the upside, and elevated funding rates are making leveraged bets increasingly expensive. This suggests that the market may be due for a breather after an overheated run.

Analysts note that while short-term ceilings for bitcoin remain unclear, the memory of past liquidation events, such as the $2 billion event in February, is still fresh in traders' minds. Options data reflects a cautious optimism, with short-dated implied volatility ticking higher but remaining below 2023 averages. September and December risk reversals still favor call options, indicating longer-term bullishness, but traders appear reluctant to chase upside in the near term.

Some analysts predict that the road to $150,000 by Q3 is increasingly plausible, driven by ETF inflows, supply constraints, and macro tailwinds such as a weakening dollar and potential Fed cuts. However, they also caution that profit-taking, rate speculation, and geopolitical risks could spark a short-term pullback, potentially dragging bitcoin into a $105,000–$115,000 consolidation zone. This highlights the need for traders to remain vigilant and prepared for potential market volatility.