Crypto’s New Normal: Another $1 Billion Liquidation Day Shakes the Market

Core Insights - The crypto market experienced over $1 billion in liquidations within 24 hours, affecting more than 190,000 traders, indicating a trend of significant volatility and leveraged trading losses in the crypto space [1][2]. Liquidation Data - A total of $1.03 billion in positions were liquidated, with over 70% being long positions amounting to $726.5 million, while short positions accounted for $308.2 million [2]. - The largest single liquidation was a BTC-USD position worth $96.51 million on the decentralized exchange Hyperliquid [2]. Market Performance - The broader cryptocurrency market saw a 3.7% decline, with Bitcoin dropping below $90,000 before recovering to over $91,000 [3]. - Ethereum briefly fell below the $3,000 mark, trading at $3,050, down 4.4% in the past day, and has decreased nearly 40% since October 6 [4]. Cumulative Liquidations - Cumulative liquidations over the past week exceeded $5 billion, with the cryptocurrency sector losing $1.2 trillion in market capitalization over the last 42 days, representing a 28% decline in total value [5]. - The current market cap is approximately 24% lower than levels seen during the October 10 market crash, which resulted in over $19 billion in liquidations [6]. Market Dynamics - The ongoing liquidation trend suggests a structurally fragile market, exacerbated by intensified institutional outflows from mid-to-late October [7]. - Traders are increasingly engaging in high-leverage positions (20x–100x), where even a 2% price swing can lead to complete liquidation of trades [7].