Crypto Market Liquidations Hit $735 Million as Altcoins Bear Heavy Losses

Cryptocurrency markets saw a sharp correction on Tuesday, wiping out nearly $735 million in leveraged positions as traders faced widespread liquidations. Altcoins, particularly Ether (ETH) and XRP, absorbed heavier losses than Bitcoin (BTC), signaling increased speculative activity outside the leading cryptocurrency.

Data from CoinGlass revealed ETH futures led liquidations at $152.8 million, followed by XRP at $88.6 million. Bitcoin recorded $65.3 million in liquidations despite its larger market cap and liquidity. Solana’s SOL and Dogecoin (DOGE) also suffered, with $41 million and $40 million in positions cleared, respectively. Several smaller DeFi tokens, including SPK and PUMP, saw more than $10 million liquidated.

The sell-off occurred without a clear external trigger, but analysts suggest profit-taking near resistance levels intensified the move. ETH recently approached the $4,000 mark, while Bitcoin hovered above $118,000 before the drop. At press time, ETH trades near $3,540, down 3.6%, XRP at $3.25, down 6%, and Bitcoin around $116,800, down nearly 2%.

Liquidations occur when leveraged positions are forcibly closed as prices move beyond margin thresholds, often sparking cascading sell-offs. Tuesday’s $625.5 million in long liquidations highlights how retail traders using high leverage were caught off guard amid recent bullish momentum.

Liquidation metrics remain a critical tool for gauging market sentiment. Large-scale long liquidations often indicate panic bottoms, while short liquidations may precede a price squeeze. When combined with open interest and funding rate data, these insights help traders identify potential reversals and manage risk in volatile markets.