A sharp decline in the crypto market on Tuesday led to one of the largest liquidation events in recent months, with $735 million in total liquidations and over $625 million from long positions. Surprisingly, Ether (ETH) and XRP traders bore the brunt more than Bitcoin (BTC), underscoring the high-risk appetite in altcoin markets.
Altcoins See Higher Liquidations Than Bitcoin
While Bitcoin remains the most traded crypto, ETH and XRP futures saw deeper losses. According to CoinGlass:
- ETH traders lost $152.78 million
- XRP traders were hit with $88.58 million in losses
- BTC came in third with $65.29 million liquidated
This suggests altcoin traders were using higher leverage, exposing themselves to larger downside risk.
The outsized liquidations are notable because they occurred without any major negative catalyst, highlighting the fragility of markets near resistance levels.
Retail Leverage Triggers a Cascade Selloff
The decline appears to have been driven by a combination of profit-taking and excessive leverage, especially in altcoins. Traders betting on continued upside were caught off guard as momentum suddenly flipped.
Over $625 million in long positions were liquidated, signaling a panic exit from bullish setups.
Popular altcoins like Solana (SOL) and Dogecoin (DOGE) also faced steep liquidations, at $41 million and $40 million respectively. DeFi tokens SPK and PUMP each saw more than $10 million wiped out.
Key Price Levels Rejected: Market Takes a Breather
The sharp move came after major assets reached critical resistance zones:
- ETH recently approached $4,000 before reversing to $3,540 (down 3.6% on the day)
- XRP dropped 6% to $3.25, extending its weekly loss to over 12%
- BTC slipped 2%, holding relatively strong around $116,800
Altcoins failed to break out above resistance, leading to fast unwinding of leveraged positions.
What’s Next for Traders?
Large-scale liquidations often lead to “panic bottoms”, especially when long positions are flushed out. Historically, this clears the way for more stable price action or even a short-term rebound.
Still, the market remains volatile. Traders may wait for Bitcoin dominance to stabilize and volume to normalize before re-entering high-beta altcoins.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.