In the last 24 hours, the cryptocurrency market experienced a staggering wave of liquidations totaling nearly $1.7 billion, coinciding with a 6% drop in total market capitalization. Bitcoin (BTC) was particularly affected, contributing to nearly half of the total liquidations as traders who anticipated further price increases faced significant losses during this downturn.
Data from CoinGlass indicates that approximately 270,438 traders were liquidated during this turbulent period, with long positions suffering the brunt of the losses, amounting to $1.57 billion. In contrast, short positions accounted for $107.74 million. Specifically, Bitcoin liquidations reached $768.69 million, predominantly driven by long positions totaling $745.3 million. Ethereum (ETH) followed a similar trajectory, with total liquidations of $417.43 million, of which $390.5 million stemmed from long positions.
Among exchanges, Hyperliquid recorded the highest liquidation volumes, with $567.2 million from long liquidations and $28.1 million from shorts. Bybit followed closely with $329 million in long liquidations and $11.9 million in short positions, while Binance reported $152.3 million in long and $29.5 million in short liquidations. These forced closures, triggered when margin accounts can no longer sustain losses, are designed to safeguard traders and exchanges from incurring unmanageable debts.
The recent market declines underline the risks associated with leveraged trading, where a sudden downturn can lead to cascading liquidations, further intensifying downward pressure on asset prices. As evidenced, Bitcoin and Ethereum fell to two-month lows, reaching $80,815 and $2,687, respectively, during early Asian trading hours. Although there was a slight recovery later, with Bitcoin priced at $82,023 and Ethereum at $2,737, the overall sentiment remains bearish.
Furthermore, the turmoil was not isolated to cryptocurrencies, as precious metals and equities also faced declines. The Crypto Fear & Greed Index dropped to 16, indicating extreme fear within the market, marking its lowest point this year, down from 26 just a day prior. Panic was evident on-chain as well, with analytics platform Lookonchain reporting a significant sell-off by whales, signaling capitulation among major market players. The combination of escalating geopolitical tensions, aggressive deleveraging, and deteriorating market sentiment presents a formidable challenge for cryptocurrency markets.
As February approaches, the market watches closely to see if this recent pullback will pave the way for a rebound or if the prevailing volatility will persist, keeping prices under strain in the near future.
