Crypto Quake: $811M Liquidated, $100K Hopes on Hold

A recent, brief drop in
Bitcoin’s
price, dipping under $110,000 within the last day, resulted in a significant wave of liquidations across the cryptocurrency market.

Data from
Coinglass
reveals that crypto traders who had placed leveraged bets experienced a collective loss of $811.6 million. This market turbulence forced over 179,000 traders to exit their positions.

Sean Dawson, Head of Research at Derive.xyz, commented on this widespread liquidation event, telling
CryptoSlate:

“The sudden market movement appears to be rooted in excessive leverage, particularly following the surge in Ethereum’s value. Furthermore, an overnight decline in the S&P 500 placed additional pressure on riskier assets.”

Notably, the single largest liquidation was a BTC-USDT trade on HTX, amounting to $39.2 million.

Traders with long positions, those anticipating a price increase, incurred the majority of the losses, totaling $699.5 million. Conversely, short traders lost $112.2 million. The imbalance suggests an overestimation of the recent rally’s sustainability, leaving long traders exposed when prices corrected.

Bitcoin liquidations were the most substantial, with traders losing over $270 million in a single day. Glassnode
reported
on August 25th that over $150 million in long positions were eliminated, ranking among the largest such events since December 2024.

Ethereum
saw $266 million in liquidations, primarily affecting long positions. Other prominent cryptocurrencies, including
Solana,
Dogecoin, and
XRP, experienced drawdowns of $38.5 million, $18.8 million, and $17.3 million, respectively.

Bitcoin Price Could Dip to $100,000

The considerable liquidations have fueled increased bearish sentiment among cryptocurrency traders, according to data provided by Derive.xyz.

Information from the crypto derivatives trading platform indicates that traders now estimate a 35% probability of Bitcoin’s price declining to $100,000 before the end of September. They also foresee a 55% chance of Ethereum retesting the $4,000 mark.

Dawson elaborated that the 25-delta skew has turned negative for both Bitcoin and Ethereum, suggesting a higher premium for downside protection compared to upside exposure.

According to him:

“We are observing the strongest demand for downside risk mitigation in the last two weeks. It appears traders are preparing for possible retests of $4,000 for Ethereum and $100,000 for Bitcoin.”

He further added that broader economic uncertainties and market instability are impacting the outlook, which is leading to a reassessment of risk appetite throughout the cryptocurrency market.

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