The crypto community faced a mass crash after major tokens like Ethereum and Bitcoin began to drop, while long liquidations exceeded $1 billion in the last hour of trading.
Summary
Prolonged liquidations in the crypto market led to one of the largest mass liquidations of the entire cycle, exceeding $1 billion in just one hour.
Concerns about inflation and aggressive actions by central banks led traders to rush to liquidate assets, moving their capital into safer assets.
The cryptocurrency market has just experienced one of the largest crashes of the entire cycle, completely bankrupting traders using leverage. Traders are in a panic: in just one hour, the total volume of liquidations of cryptocurrency positions exceeded 1 billion dollars. The leader in this regard is Bybit with liquidations amounting to 712 million dollars.
The crash mainly occurred during market downturns due to the sharp decline in Bitcoin prices and it has already dragged down the entire mass of altcoins.
According to CoinGlass, in the last hour alone, 406,814 traders were liquidated. The total amount of liquidations amounted to $1.74 billion, with $1.04 billion coming from long positions, accounting for more than 95% of the total liquidation amount. ETH accounted for $309 million of the total liquidation amount in the last hour, while BTC accounted for $214 million.
Historically, long positions have invariably absorbed the largest losses, with the largest recorded events overshadowing even the worst margin calls and serving as direct lessons in leverage management.
The last major liquidation of cryptocurrency assets occurred in February 2025, when up to 2.2 billion dollars were liquidated in 24 hours, primarily on long positions. Ethereum holders suffered the most, followed by Bitcoin. As a result of trading, around 700,000 traders lost their positions.
In the same month, traders also witnessed a domino effect caused by the unexpected imposition of trade tariffs by the Trump administration, which caused panic and led to the liquidation of positions on all major platforms. The CEO of Bybit predicted that actual global liquidations would exceed between 8 to 10 billion dollars.
Forced liquidation: why is the cryptocurrency market collapsing now?
This time, the mass liquidation of cryptocurrency assets was triggered by rising interest rates. Expectations of a tight monetary policy tend to negatively impact alternative assets such as cryptocurrencies. When the yields of safer assets, such as bonds and savings, rise, cryptocurrencies become a less attractive investment for capital investors.
After the decrease in interest rates by the Fed earlier last week, the growth was short-lived, as concerns about global inflation and recent economic indicators led traders to be less inclined to trade alternative, riskier assets. Just a few days ago, the central banks of the Gulf countries lowered their key interest rates, following the example of the U.S. Federal Reserve, which lowered interest rates by 25 basis points.
The largest cryptocurrency by market capitalization fell from about $114,400 to nearly $112,000 in just a few minutes, before stabilizing around $112,900.
The sharp decline coincided with one of the largest liquidations of long positions in this cycle, when more than 1 billion dollars in leveraged positions were completely wiped out in just one hour. This forced selling created a cascading effect, accelerating the decline of Bitcoin as margin calls and liquidations led to an increase in the number of automatic sell orders.
The Relative Strength Index during the significant surge fell to the oversold zone, briefly dropping below 20, which indicates the speed and seriousness of traders' actions. Such deep states of oversold often follow crashes caused by liquidations, as price dynamics increasingly come down to forced exits rather than organic sales.
PS: This morning I wrote about what to expect tomorrow and said that the market would 'shake' tomorrow, but this happened today and to be honest, I didn't think it would be so significant. Practically all altcoins were liquidated for a total of about $1500. Surprisingly, Solana held up, BTC since I opened it back at $110,500, and I was pleased that the orders for ETH that were placed back on August 20 worked out, which no one believed in. I wrote about BTC, ETH, Sol in my articles. In principle, I will even walk away with a good profit due to Ethereum and the resilience of Sol and BTC (the main part is of course in spot) if there is no deeper correction that follows...... This is another lesson for us, that 80% of capital should be either in storage, or better in storage and at the same time in passive income through staking, deposits, pools, etc. here it depends on what you are knowledgeable about. Futures are 20% - no more!
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