The cryptocurrency market has witnessed a staggering wave of liquidations, exceeding $1.1 billion within a single 24-hour period. This dramatic event was largely fueled by the liquidation of long positions, which accounted for approximately $968 million of the total amount. The fallout impacted over 246,000 traders, drawing immediate parallels to the infamous FTX collapse that rocked the market in 2022.
Major cryptocurrency exchanges have reported significant liquidation activity. HTX experienced the largest single loss with a BTC-USDT position liquidated for $44.29 million. Additionally, prominent platforms such as Hyperliquid and Bybit reported long liquidations totaling $134.16 million and $122.57 million, respectively, all occurring within just four hours. Liquidations happen when leveraged positions are forcibly closed due to insufficient margin, often exacerbating price fluctuations.
The pronounced trend towards long liquidations suggests that many traders had maintained an optimistic outlook prior to the market”s abrupt reversal. Although this incident is noteworthy, it does not rank among the ten largest liquidation events, the record being set at $19.16 billion in October 2025, triggered by the US-China tariff announcement. Technical indicators for Bitcoin are currently signaling caution, with analysts divided on whether this situation represents the onset of a prolonged bear market or merely a short-term correction.
Market sentiment has plummeted to levels reminiscent of the FTX crisis. Analyst Negentropic has highlighted that Bitcoin”s Relative Strength Index (RSI) is now situated in highly oversold territory, a condition not observed since 2022. Furthermore, the asset has fallen below its lower volatility band, indicating increased stress within the market. The aftermath of the 2022 FTX collapse resulted in substantial losses and shaken confidence, prompting major market players to liquidate their holdings as Bitcoin prices plummeted. Today, while prices have indeed dropped and liquidity appears strained, the overall infrastructure of exchanges and the cryptocurrency ecosystem remains intact.
Divergent opinions among experts reflect the uncertainty surrounding the current market dynamics. Some analysts maintain that this recent turmoil does not definitively signal the start of a new bear market. For instance, Ki Young Ju, CEO of CryptoQuant, pointed out that the average cost basis for Bitcoin holders over the past 6 to 12 months hovers around $94,000. Unless prices dip below this threshold, current weakness might be viewed as a corrective phase rather than a long-term downturn.
Haseeb Qureshi from DragonFly Capital emphasized that the losses observed at present stem primarily from declining prices rather than systemic failures akin to those experienced during the 2022 crisis. This divergence of views underscores the ongoing uncertainty, yet the resilience of the underlying crypto infrastructure suggests that there may be potential stability, even amidst short-term volatility.
