Macro Fears and Leverage Trigger $1.7B Crypto Liquidation in 24 Hours
Aime Summary
The crypto market experienced a severe liquidation wave in late 2025, with over $1.7 billion in leveraged positions wiped out within 24 hours, according to Coinglass data[3]. This marked one of the largest single-day liquidation events in months, driven by macroeconomic uncertainty, weak liquidity, and global market volatility. Ether (ETH) and BitcoinBTC-- (BTC) were among the hardest-hit assets, with ETHETH-- plummeting 9% to $4,075 and BTCBTC-- falling nearly 3% to $111,998. Over 407,000 traders were liquidated in the 24-hour period, underscoring the fragility of leveraged positions in a high-volatility environment[1].
The liquidation surge was fueled by a confluence of factors, including rising recession fears, weak macroeconomic data, and a parallel global stock sell-off. Data from Coinglass revealed that $1.615 billion in long positions and $85.88 million in short positions were liquidated, with EthereumETH-- and Bitcoin accounting for the largest losses. The sharp sell-off exposed the risks of overleveraged bullish bets, particularly in smaller-cap tokens like DogecoinDOGE-- (DOGE), SolanaSOL-- (SOL), and CardanoADA-- (ADA), which lost over 5% in 24 hours[1].
Analysts attributed the market’s instability to macroeconomic uncertainty, despite the Federal Reserve’s recent interest-rate cut. Nassar Achkar, chief strategy officer at CoinW, noted that the market’s trajectory remains contingent on upcoming economic data and Fed signals. “Bitcoin’s dominance is likely to persist amid this uncertainty, capping upside potential for Ethereum and DeFi despite their yield advantages,” he said. Investors are closely watching U.S. PMI data, jobless claims, and Fed Chair Jerome Powell’s upcoming speech for clues on monetary policy direction[1].
The liquidation crisis highlighted the role of liquidation data as a contrarian indicator in crypto markets. Large-scale liquidations often signal panic bottoms or short squeezes, with spikes in liquidation volume indicating overcrowded trades and potential reversals. Tools like liquidation heatmaps, which visualize areas of overleveraged positions, have become critical for traders to identify reversal zones and optimize risk management. For instance, red zones on heatmaps indicate short liquidations (potential price rebounds), while green zones signal long liquidations (further downside)[2].
Institutional adoption and regulatory clarity have further widened the performance gap between Bitcoin and Ethereum. Bitcoin’s dominance surged to over 62% in 2025, driven by record inflows into spot ETFs and its classification as a commodity in key jurisdictions. In contrast, Ethereum faced regulatory hurdles, including uncertainties around staking mechanisms, which dampened institutional interest. The BTC/ETH price ratio reached 54, a level not seen since the pre-pandemic era, reflecting divergent market perceptions and capital flows.
Despite the turmoil, signs of stabilization emerged by April 2025. A wave of deleveraging cleared overleveraged long positions, reducing systemic risk and creating conditions for a potential rebound. CoinGlass noted that short liquidations spiked in April, with $600 million in short positions wiped out—indicating a possible shift in market sentiment. However, long liquidations remained dominant, suggesting bullish sentiment persisted in the broader market.
Looking ahead, the crypto market’s trajectory will depend on macroeconomic clarity, regulatory developments, and liquidity dynamics. With seasonal holiday slowdowns expected to prolong consolidation, investors are advised to exercise caution with high-leverage trading. The upcoming Fed policy decisions and potential approval of Ethereum spot ETFs could serve as catalysts for a broader market recovery, though volatility remains a defining feature of the crypto landscape[1].
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