The crypto market faced a wave of forced liquidations worth $1.7 billion in the past 24 hours, according to data from Coinglass. These liquidations happen when traders cannot meet margin requirements and exchanges automatically close their positions. Of the total liquidations, $1.62 billion came from long positions. In just four hours, $1.09 billion was cleared, showing how quickly leverage can vanish when prices move against traders. More than 404,000 traders were liquidated, with the single largest order being a $12.74 million BTC-USDT swap on OKX.
Bitcoin fell 2.5% to $112,890 while ether dropped 6.2% to $4,196. Analysts said this was the biggest long liquidation of 2025 so far, creating a bearish record. Bitcoin briefly dipped to $112,000, wiping out over $1 billion in long liquidations in one move. Charts from Coinglass show open interest worth $2 billion erased, and a liquidation heatmap highlights that longs near $113,000 were the most vulnerable. Some traders believe Bitcoin may retest support closer to $100,000 before finding strength again.
Coinglass data suggests actual liquidation numbers could be even higher, since API limits and incomplete reporting often understate the scale. This gap between reported and real liquidations can hide the true level of market risk and volatility. Glassnode confirmed that leverage was a key factor behind the losses, and analysts noted that a $3,000 move in Bitcoin’s price was enough to trigger more than $1 billion in liquidations. Such events underline the risks of leveraged trading in a volatile market.
Reactions among traders were split. Some saw the dip as a healthy support test, pointing out that Bitcoin held a higher low around $112,000 and could push for $120,000 if momentum returns. Others warned that the breakdown of a rising wedge on the BTC/USD daily chart could drag the price toward the $100,000 zone. Trader Captain Faibik argued that late buyers got trapped after August and that another bearish leg is likely. At the same time, commentators like WhalePanda expressed frustration that Bitcoin failed to rally despite stock indexes and gold hitting all-time highs. ETFs reported $890 million in inflows last week, and MicroStrategy added more Bitcoin to its treasury, yet the price stayed flat.
Ethereum also faced heavy liquidations, with ether dropping over 6%. The GMETHEX index, which tracks top Ethereum tokens, fell 7.3%. The GMRWA index, focused on real-world asset tokens, dropped 6.7%. Traders watching these indices see weakness across altcoins as Bitcoin struggles to hold key levels. Market observers believe these liquidations may signal a pre-euphoria stage, as defined by the MVRV metric tracked by CryptoQuant. The MVRV compares market value to realized value, and the current divergence between long-term and short-term holders mirrors patterns seen before past bull market tops. While not yet at extremes, this trend suggests the market still has upside potential before a final peak.
Macroeconomic factors remain central to the outlook. The Federal Reserve’s decision to cut rates for the first time in 2025 is still influencing sentiment. Chair Jerome Powell is set to deliver a speech this week, and traders will be watching for signals on future interest rate cuts. The Personal Consumption Expenditures index, the Fed’s preferred measure of inflation, is also due. CME FedWatch data shows markets expect another 0.25% cut at the October meeting, but Fed officials remain divided. Some see no need for further cuts, while others argue weak labor market data supports easing. For crypto traders, these decisions could bring sharp volatility.
Political rumors added another layer of uncertainty. Reports suggest a major U.S. political announcement on Bitcoin could arrive this week. Dennis Porter, CEO of the Satoshi Fund, claimed the news would reshape Bitcoin’s role in U.S. policy. Speculation about a Strategic Bitcoin Reserve, where the U.S. government would hold Bitcoin as a strategic asset, has circulated for months. Galaxy Digital’s Alex Thorn argued the market underestimates the chance of such a move. Lawmakers recently met with industry leaders, including Michael Saylor, to discuss the idea.
The combination of heavy liquidations, central bank policy, and political speculation has created a tense environment. Traders face the immediate challenge of reduced leverage after billions in long liquidations. Bitcoin sits near support at $112,000, with traders debating whether it rebounds toward $120,000 or slides closer to $100,000. Ethereum and altcoins follow Bitcoin’s lead, reflecting broader market weakness. At the same time, ETF inflows show steady institutional demand even as prices falter.
For enthusiasts tracking the cycle, the pre-euphoria stage offers hope that the bull market is not over. Historical data shows similar conditions preceded major parabolic rallies. Still, with liquidation heatmaps highlighting billions in potential long liquidations between $106,000 and $108,000, downside risks remain. Traders will watch closely as Powell speaks, inflation data lands, and political news emerges. The events of this week may set the tone for the final months of 2025, shaping whether the latest liquidation wave marks the end of a cycle or just another step in Bitcoin’s volatile path.
