Billions of dollars have been liquidated in the crypto market over a span of 24 hours, surpassing the FTX collapse and the COVID-19 crisis, with Ethereum (ETH) taking the brunt.
A Unprecedented Wave of Liquidations
In just 24 hours, over $2.3 billion was liquidated in the crypto market, an event that exceeds the collapse of FTX and the COVID-19 crisis. The primary victim of this debacle is Ethereum (ETH), with liquidations totaling $609.9 million across long and short positions.
Over 730,000 traders saw their positions annihilated in this brutal movement, exacerbated by geopolitical uncertainty related to the trade war between major economic powers. The largest recorded operation involves a $25.6 million liquidation on the ETH/BTC pair on Binance, according to CoinGlass data.
Binance at the Center of Liquidations
Binance, which accounts for a significant portion of global trading activity, absorbed nearly 40% of the total liquidations during this period. Other major exchanges such as OKX, Bybit, Gate.io, and HTX also witnessed massive liquidations, underscoring the extent of the purge that hit the market.
The long positions, representing 84% of the total liquidations, were particularly impacted.
Are Liquidation Data Misleading? ByBit Estimates $8 to $10 Billion
ByBit CEO Ben Zhou spoke out, stating that the liquidations in the crypto market were much higher than those shown on the Coinglass tool. Indeed, ByBit alone recorded $2.1 billion in liquidations. He estimates the total liquidations in the past 24 hours to be between $8 and $10 billion.
A Shock Triggered by the Trade War
The sudden drop in the crypto market coincides with Donald Trump’s announcement of a first wave of tariffs targeting China, Canada, and Mexico, with threats against Europe. This decision immediately led to a double-digit decline in major altcoins, including Ethereum (ETH) and XRP.
A Growing Climate of Fear
The Crypto Fear & Greed Index, which measures investor sentiment, now displays a fear signal. This level of increasing caution could mark a buying opportunity for contrarian investors, as has often been observed during previous episodes of market panic.
Despite the brutality of this correction, the crypto market remains buoyed by growth prospects, particularly due to the enthusiasm for Bitcoin Spot ETFs, which attracted nearly $5 billion in investments in January. It remains to be seen whether geopolitical tensions will curb this momentum or if the market will quickly regain its optimism.
