Core Insights - The cryptocurrency market experienced a significant decline, with liquidations totaling nearly $1.7 billion in a single day, primarily affecting Dogecoin, Solana, and Ethereum among the top cryptocurrencies by market capitalization [1][2]. Market Performance - Bitcoin's price fell by 2.3%, showing smaller losses compared to Ethereum and other major altcoins. Dogecoin suffered the most, dropping by 9.9%, followed by Solana at 6.9% and Ethereum at 6.2%. The total crypto market capitalization decreased by 3.7%, reaching approximately $3.98 trillion [2]. Liquidation Details - Approximately $1.68 billion in positions were liquidated across major exchanges within 24 hours, with over $1.6 billion coming from long positions. More than 390,000 traders were liquidated, with the largest single order valued at $12.7 million on OKX's BTC-USDT swap. Ethereum saw $501 million in liquidations, while Dogecoin accounted for about $61 million [3]. Market Dynamics - The $1.7 billion in liquidations indicates a significant reduction of leverage in the market, with 95% of wiped-out positions being long, suggesting that overexposed bulls were caught off guard. The peak of liquidations saw over $1 billion liquidated in just one hour [4][6]. Market Sentiment - Users of the prediction market Myriad have turned bearish on Bitcoin, with a slight majority predicting a drop to $105,000 rather than a rise above $125,000. However, a significant majority still expect Bitcoin to remain above $105,000 throughout September [4]. Sector Analysis - The analysis indicates that riskier categories, particularly leveraged futures and perpetual positions, experienced outsized liquidations compared to shorts. Leveraged longs were the first to be squeezed, leading to a liquidity spiral [5].