Crypto market sees $2B in liquidations — bigger than Covid and FTX crashes

The cryptocurrency market suffered a sell-off in the last 24 hours, wiping out $2.29 billion in liquidations — more than the Covid crash and the FTX collapse.

According to CoinGlass data , 733,974 traders were liquidated in the past day, with $1.89 billion coming from long positions, making up 82.73% of total liquidations.

Liquidation in futures trading occurs when a trader's position is forcibly closed due to insufficient margin to cover losses. Long positions bet on an asset's price increasing, while short positions profit from price declines. When prices move against a trader's position, exchanges liquidate holdings to prevent further losses.

The largest single liquidation order took place on HTX, where a BTC-USDT trade worth $38.78 million was wiped out.

Bitcoin dropped 2.24%, trading at $95,000, while Ethereum plunged 14%. Major altcoins, including XRP, Solana, and Binance Coin, also fell between 10-15% amid the broader market downturn.

During the Covid-19 crash on March 13, 2020, the global crypto market saw its worst-ever single-day correction, plunging 39.6%. The total market capitalization dropped from $223.74 billion to $135.14 billion overnight. Bitcoin also recorded its biggest price decline of -35.2%, while Ethereum suffered an even steeper drop of -43.1% in the same period. The crash was triggered by widespread panic selling as investors fled risk assets amid global uncertainty.

Tariffs and trade war fears trigger sell-off

Analysts point to growing fears of a global trade war as a key trigger for the liquidation cascade.

According to QCP analysts, the Trump administration implemented 25% tariffs on Canadian and Mexican goods, alongside a 10% levy on Chinese imports. Canada retaliated swiftly, imposing 25% tariffs on $106 billion worth of U.S. goods, with Mexico expected to follow suit.

Treasury yields bear-flattened — 2-year yields rose while 10-year yields fell, signaling inflation fears and long-term economic risks.

Equities fell across global markets, while gold dipped and oil spiked in response to uncertainty. Crypto took the hardest hit, acting as a high-risk asset proxy before US markets opened.

“This decorrelation reinforces the view that today’s risk-off move is driven by cross-asset portfolio rebalancing rather than a single-asset event,” QCP analysts noted. “Expect continued volatility as Trump prepares to negotiate with Canada and Mexico tonight, while claiming tariffs on the EU are 'definitely happening.'”

Ethereum hit hardest in liquidations

Ethereum saw $614.34 million in liquidations, with 77.07% of them being long positions.

Long positions wiped out $473.49 million while short positions liquidated $140.85 million