Crypto leverage crunch triggers $2.6B liquidations

TLDR

A violent derivatives shakeout wiped roughly $2.6 billion of leveraged crypto positions in 24 hours as Bitcoin plunged toward $60,000 and then partially rebounded.

1. More than $2.6 billion in leveraged crypto positions were liquidated in a day, mostly long bets in Bitcoin and other majors during a swift drop toward $60,000.
2. The move was driven by crowded bullish leverage, thin liquidity, and macro risk-off, which turned a normal pullback into cascading forced selling across futures and perpetuals.
3. Leverage has meaningfully reset, but funding, open interest and sentiment still flag a fragile market where volatility and another sharp swing remain possible.

Deep Dive

1. Scale Of The Liquidations

Derivatives data from multiple outlets show over $2.6 billion in crypto positions liquidated in 24 hours, with one report citing $2.65 billion and about 586,000 traders affected, mostly long positions being closed by force over margin calls.

Bitcoin (BTC) accounted for roughly $1.1 to $1.35 billion of the wiped-out positions, with Ethereum (ETH) contributing hundreds of millions more, according to breakdowns of the event. Altcoins such as XRP, Solana (SOL) and others also saw double-digit price drops and heavy liquidations as the move spread across the market.

Bitcoin briefly fell to around $60,000, its lowest level since October 2024, before rebounding above $65,000 as some dip buyers stepped in during Asia trading, as noted in analyses of the selloff that erased over $2.6 billion in futures bets.

2. How Leverage Turned A Dip Into A Crash

Going into the move, Bitcoin futures and perpetuals open interest had pushed toward record levels, meaning many traders were running leveraged long exposure near prior highs. When key support zones around $70,000 and then $65,000 failed, those positions started to be force-closed, turning selling into a cascade.

Reports point to weak order-book depth, with Bitcoin market depth around 30 percent of its October peak, similar to post-FTX conditions, so large forced orders moved price much more than usual. Commentators like The Kobeissi Letter frame this as part of a structural downturn since late 2025, with repeated leverage washouts, not just a one-off shock, as described in an overview of $2.65 billion in crypto liquidations.

Macro conditions added pressure: risk-off in tech stocks, ETF outflows, and broader worries about growth and rates reduced risk appetite at the same time leverage was elevated. That combination made the market especially vulnerable to a sudden unwind.

3. Deleveraging And What To Watch

On system-wide metrics, perpetuals open interest has dropped about 8 percent over the past day, from roughly $589 billion to $543 billion, and total derivatives open interest is down more than 4 percent, indicating significant risk has been taken off.

Average perpetual funding rates have flipped slightly negative, and sentiment gauges sit in extreme fear. At the same time, total crypto market cap has rebounded around 12 percent over the last 24 hours to about $2.39 trillion, suggesting some transition from leveraged longs into spot and higher-conviction holders rather than a complete exit from the asset class.

Key things to monitor now are whether open interest keeps grinding lower or starts expanding again, whether funding stays negative or turns positive quickly, and whether Bitcoin can hold its broader support area while ETF flows and macro data stabilize.

Conclusion

The $2.6 billion liquidation wave was a classic leverage crunch: crowded longs, thin liquidity and macro stress combined to magnify a price drop into a market-wide flush.

Deleveraging has reduced some systemic risk but left sentiment fragile, so the next phase depends on whether fresh capital and calmer macro conditions absorb volatility or whether another leg of forced selling emerges from still-stressed players.