Crypto markets have seen a sharp leverage reset over the past 24 hours, with over $584 million in positions liquidated, as highly skewed long positions were forced to exit amid limited liquidity and fragile risk sentiment.
Data shows that 181,893 traders were liquidated, with long positions accounting for more than 87% of total losses – a clear sign that the move was driven less by new bearish catalysts and more by the market’s inability to sustain massive bullish bets.
Bitcoin and Ethereum led the wipeout, posting $174.3 million and $189 million in liquidations, respectively, according to liquidation heatmap data. The largest liquidation order was a $11.58 million BTCUSDT position that occurred on Binance.
Binance, Bybit and Hyperliquid together accounted for almost three-quarters of the total liquidations, with Hyperliquid standing out for the severity of the imbalance: 98% of positions liquidated on the platform were long, highlighting how aggressively traders were positioned before the move.
The selloff event unfolded without a major catalyst, reinforcing a broader theme that has defined recent market action: low-conviction rallies, based on leverage rather than spot demand, are proving increasingly fragile.
Market participants say the structure of the wipe resembles a classic liquidity sweep rather than panic selling. Prices pushed just enough below key intraday support levels to trigger cascading stop-losses and forced liquidations, before stabilizing – a typical pattern of range or end-of-cycle conditions.
“The market remains extremely sensitive to positioning,” said one derivatives trader. “When leverage builds up on one side, it doesn’t take much to force a reset, especially in tougher conditions during the holidays.”
Altcoins have also been subject to forced sales, but on a smaller scale. Solana recorded $34.5 million in liquidations, while XRP and Dogecoin recorded $14.5 million and $11.8 million, respectively. The concentration of losses on the majors suggests that it was institutions and large traders who bore the brunt of this development, rather than just retail speculation.
Despite the scale of the selloffs, spot prices avoided a broader breakout, reinforcing the idea that the event reflected positioning excesses and not a decisive change in market trend.
Nevertheless, traders warn that repeated and prolonged hot flashes indicate a deterioration in market structure. Until leverage eases and cash demand returns, volatility will likely remain on the downside – with rallies vulnerable to sharp reversals.
