Bitcoin, Ethereum, and other cryptocurrencies have fallen sharply over the past 24 hours, triggering a wave of long position liquidations on derivatives exchanges. Data from CoinGlass shows this market move has led to over $650 million in liquidations.
Liquidations occur when an exchange forcefully closes a leveraged position after its losses reach a certain threshold. Long positions are liquidated when prices fall, while short positions are closed after a price surge. The more leverage a trader uses, the more vulnerable their position is to sudden price swings.
Of the total liquidations, approximately $584 million, or nearly 90%, were long positions. This highlights the one-sided nature of the recent volatility.
Interestingly, Ethereum led the liquidations with over $235 million, surpassing Bitcoin’s $186 million. This is likely because Ethereum’s price dropped more sharply. Among altcoins, Solana saw the highest liquidations at $37 million, followed by XRP at $16 million and Dogecoin at $12 million.
In other news, Bitcoin’s decline has pushed its price below a key on-chain level known as the Active Realized Price, which is currently around $87,900. This metric represents the average cost basis of active Bitcoin investors, meaning the drop has put the average active holder into an unrealized loss position.
As of now, Bitcoin is trading near $87,200, down over 3% in the past week.
Frequently Asked Questions
FAQs Bitcoin Ethereum Sharp Drop Liquidations
Beginner Questions
What happened to Bitcoin and Ethereum
Both cryptocurrencies experienced a sharp sudden drop in their market prices over a short period
What does long positions liquidated mean
It means traders who had borrowed money to bet that prices would go up were forced by their exchanges to sell their holdings at a loss to repay their loans as the price drop eroded their collateral
Why were these traders forced to sell
They used high leverage When the price fell the value of their investment fell close to or below the value of their loan triggering an automatic sale to prevent the exchange from losing money
Is my Bitcoin in a regular wallet safe from this
Yes This liquidation event only affects traders using borrowed funds on specific exchanges If you simply hold your coins in a personal wallet they are not at risk of being automatically sold
What caused the price to drop so suddenly
Theres rarely a single cause Its often a combination of factors like negative market news large sell orders broader economic concerns or a cascade of automatic liquidations triggering more selling pressure
Intermediate Advanced Questions
What is leverage and how does it lead to liquidation
Leverage is using borrowed capital to increase a trading position For example using 10x leverage a 10 price move against you can wipe out 100 of your initial capital triggering a liquidation where the exchange closes your position
What does 600 million in long positions liquidated signify for the market
It indicates extreme volatility and a massive rapid unwinding of bullish bets This selling pressure from liquidations can exacerbate the price drop creating a cascade or liquidation spiral
Whats the difference between a stoploss and a liquidation
A stoploss is a voluntary order you set to sell at a specific price to limit losses A liquidation is an involuntary forced closure of your position by the exchange because your collateral no longer covers your loan
Where can I see data on liquidations in realtime
Sites like Coinglass Bybit or Glassnode track liquidation amounts across major exchanges showing long vs short liquidations and which price levels might trigger more