Over 1.6M traders were liquidated, with a 7:1 long-to-short ratio driving extreme downside pressure.
Bitcoin saw a $380B market cap drop after the first-ever $20K candlestick before rebounding.
Analysts link the crash to leverage, thin liquidity, and timing of the tariff announcement, not weak fundamentals.
Digital assets erased billions in value on Friday as heavy leverage collided with unexpected macro headlines. Selling pressure began at 9:30 AM ET, nearly ninety minutes before President Donald Trump posted about a 100% tariff on Chinese goods.
According to analysts at The Kobeissi Letter, large traders had already positioned for downside with sizeable short exposure. By late afternoon, activity intensified and set off the largest single-day liquidation ever recorded in digital assets.
Early Positioning and Liquidation Ratios
Notably, The Kobeissi Letter reported that long positions outweighed shorts by a wide margin before the drop. Roughly $16.7 billion in longs were wiped out compared to $2.5 billion in shorts, a ratio near 7 to 1.
Around 1.6 million traders faced forced liquidations within 24 hours. Analysts pointed to two major short entries at 4:30 PM ET and 4:49 PM ET, totaling more than $23 million. That timing set the stage for what followed minutes later.
The period between 5 PM and 6 PM ET saw volumes surge while liquidity remained thin. The tariff announcement arrived close to 5 PM, adding stress to an already fragile structure. The Kobeissi Letter noted that some positions declined by as much as 95% during the slide, fueled by excessive leverage and rapid liquidation triggers.
Market Depth and Historic Price Swing
By 5:20 PM ET, whales began closing shorts into the bottom as trading volume overwhelmed long exposure. Bitcoin printed the first $20,000 candlestick in its history, representing a market cap loss of roughly $380 billion before a sharp rebound. The Kobeissi Letter stated the collapse reached nine times the previous liquidation record.
Analysts described the event as an unprecedented unwind driven by technical conditions rather than a deterioration in fundamentals. They said a correction had been overdue and emphasized that the structure of the crash aligned with temporary imbalances.
Reactions From Industry Observers
Cory Klippsten, CEO of Swan Bitcoin, said short term swings should be expected as markets process the tariff announcement and its broader implications. He argued that flushed leverage could set up the next phase once volatility cools. Other market observers said that the reported $20 billion in liquidations may reflect only part of the total damage.
While some digital assets plunged up to 95% during the session, The Kobeissi Letter reiterated that they remain bullish over the long term and expect negotiations on trade to progress. The analysts said the sell-off will be studied for years due to its scale and timing.
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