Crypto Market Bloodbath: $1.7B Liquidations as Bitcoin and Altcoins Lead Sell-Off

The cryptocurrency market faced a sharp correction this week, with more than $1.7 billion in leveraged positions wiped out within 24 hours, marking one of the largest liquidation events of 2025.

According to CoinGlass data, $1.61 billion in long positions accounted for the majority of losses, compared to just $85.88 million in shorts. Over 400,000 traders were liquidated, underscoring the risks of excessive leverage in a highly volatile market.

Bitcoin, which had recently been trading above $117,000, fell below $113,000, triggering a cascade of stop-loss orders. Ethereum (ETH) was hit the hardest, with $492 million in liquidations, nearly half of the total. The broader market shed more than $150 billion in value, pushing the global crypto market cap down to $3.88 trillion.

Altcoin Season Ends Abruptly

The mass liquidations not only affected blue-chip tokens but also shook smaller altcoins that had been fueling a late-summer rally. Tokens like ASTER, WLFI, and PUMP, which recently surged during altcoin season, were among the hardest hit. Even Binance Coin (BNB), which briefly crossed $1,077, saw its gains erased as leveraged traders were forced out of positions.

The Altcoin Season Index, which had peaked at 100 points just days ago, dropped sharply to 67, signaling the official end of the altcoin rally. Historically, such seasons last just a couple of weeks, and the latest sell-off confirms a rotation back toward Bitcoin dominance, which has now recovered to 56.2%. Ethereum’s share of the market fell to 12.8%.

Market Reset or Bearish Warning?

Despite the dramatic wipeout, many analysts view the event as a healthy market reset rather than the start of a prolonged downturn. Large inflows into Bitcoin and Ethereum ETFs last week—totaling over $1.3 billion—suggest institutional demand remains strong, even as retail traders face heavy losses.

Traders argue that shakeouts like this flush out weak hands and reset overheated leverage, often paving the way for more sustainable growth. However, with macroeconomic uncertainty, regulatory developments, and thin liquidity adding pressure, the crypto market may face further volatility in the coming weeks.

For now, all eyes are on whether Bitcoin can hold above $112,000 and if Ethereum maintains support near $4,000. A deeper breakdown could trigger more liquidations, but long-term bulls remain optimistic that this shakeout will ultimately strengthen the market.