Crypto selloff triggers $1.6B liquidations

TLDR

A sharp crypto market drop forced roughly $1.6 billion of leveraged positions to be liquidated within 24 hours, with long traders taking almost all the damage.

1. Around $1.66 billion of mostly long positions were liquidated as Bitcoin fell below $66,000 and Ether under $1,900, making this the biggest wipeout since early February.
2. The cascade was amplified by heavy leverage, record spot Bitcoin ETF outflows, and a symbolic MicroStrategy sale, all while global equities and AI stocks continued to climb.
3. Key risks now are whether ETF redemptions and new short positioning persist around the 65,00060,000 Bitcoin zone, or whether this acts as a leverage reset that sets up a relief bounce.

Deep Dive

1. Size Of The Liquidation Wave

Derivatives data aggregated by multiple outlets show a liquidation event on the order of $1.8 billion over 24 hours, with about $1.66 billion in long positions and only roughly $180 million in shorts, according to CoinDesks bullish crypto bets lose 1.6 billion.

Bitcoin longs absorbed about $883 million of that total, Ether longs roughly $476 million, and Solana longs over $90 million, with the largest single liquidation a $59.7 million BTC-USDT long on HTX. Binance handled about $748 million of liquidations, or roughly 41 percent of the cascade, with close to 90 percent of positions being longs on major venues.

Spot prices reflected the stress: Bitcoin slid to the mid 65,000s, Ether broke below 1,900, and top altcoins like Solana and Dogecoin dropped around 9 percent in the same window. Total crypto market cap fell about 3 percent over 24 hours from roughly $2.39 trillion to $2.32 trillion.

2. Why The Selloff Escalated

Several overlapping drivers turned a normal pullback into a long squeeze:

1. Spot Bitcoin ETFs saw roughly $2.83.5 billion in cumulative outflows and an 11 day streak of redemptions, weakening one of the markets main demand pillars, as highlighted in analyses of ETF outflows and the Strategy sale.
2. MicroStrategy (Strategy) disclosed its first Bitcoin sale in years (32 BTC for about $2.5 million), small in size but symbolically breaking its never sell meme and denting sentiment.
3. Positioning was heavily skewed long, so once Bitcoin broke key supports in the low 70,000s, forced liquidations accelerated the drop, with articles describing a crypto correction vaporized 176 billion.

Despite the wipeout, perpetuals open interest jumped roughly 30 percent over 24 hours, and average funding rates fell sharply, which fits reports that new short positions opened into the decline while many retail accounts stayed net long.

3. What To Watch Around Here

Several thresholds now matter more than exact liquidation totals:

1. Price levels: Many desks are watching Bitcoin support around 65,000 and then 60,000; a clean break lower could invite another round of forced selling, while holding this region can support a relief bounce scenario.
2. Flows and positioning: If spot Bitcoin ETF outflows and net long crowding persist, downside risk stays elevated; a stabilization or return to net inflows would ease structural pressure.
3. Leverage metrics: High open interest after a liquidation shock means the market is still leveraged; further volatility is likely if funding flips aggressively negative (shorts paying longs) or if open interest spikes again into any bounce.

Conclusion

This selloff is less about a single headline and more about the combination of crowded longs, thinning ETF demand, and capital rotation away from crypto into AI and equities, which together triggered about $1.6 billion in forced liquidations. Whether this becomes the start of a deeper leg lower or a painful but healthy leverage flush will depend on how Bitcoin trades around the mid 60,000s and whether ETF flows and derivatives leverage stabilize in the coming days.