The crypto markets plunged into disarray on Monday as the majority of the overleverage trades collapsed on selling pressure. What initially was a relatively standard price decline cascaded into one of the worst liquidation avalanches of the year, erasing approximately $1.7 billion from trader accounts in less than 24 hours.
CoinGlass data indicate that more than 370,000 traders were hit with forced liquidations worth $1.8 billion during the brutal 24 hours. The carnage fell heaviest among Ethereum and Bitcoin speculators, although even altcoins suffered a lot of destruction across the board as market participants rushed to close positions.
CoinGlass confirmed Monday’s event as 2025’s largest long liquidation, similar to the disastrous events in late February, early April, and early August when spot markets shed hundreds of billions over compressed windows. The frequency of the events suggests institutional habits over raw market bedlam.
The liquidation carnage occurred as the total market capitalization of crypto declined by over $150 billion, dropping valuations to a two-week low of $3.95 trillion. Bitcoin pierced the $112,000 level on Coinbase as Ethereum declined below $4,150, its steepest decline since mid-August’s reversal. The brutal selloff caught even seasoned traders gasping in losses they had not anticipated.
Market analysts point to technical factors rather than fundamental weakness as the primary culprits of Monday’s devastation. Real Vision creator Raoul Pal called it a typical trend, stating that crypto markets have habitually faced false breakout attempts that trigger enormous liquidations before genuine rallies begin. “The crypto market is fixated on big breakouts, gets leveraged long before it happens, fails first try, so everyone gets liquidated,” Pal said.
Altcoin Leverage Creates Perfect Storm
Technical analyst “Bull Theory” identified excessive altcoin leverage as being one of the primary catalysts for the colossal flush-out. Ethereum liquidations amounted to more than $500 million alone, more than twice as much as Bitcoin’s long position losses. This imbalance between altcoin leverage and Bitcoin positions generated amplified selling pressure which rippled through interrelated markets.
Nassar Achkar, chief strategy officer at CoinW exchange, characterized the flush-out as “a short-term correction rather than a deviation from the long-term structural bull trend.” He emphasized that supportive monetary policy conditions continue to favor risk-on assets like Bitcoin even during short-term turbulence.
Technical Correction or Deeper Weakness?
Tony Sycamore, IG market analyst, has slightly different views on the occurrence. According to him, Bitcoin’s recent break with past correlations with tech stocks and gold just reflects technical factors which will take time to correct. The currency needs space to digest its stunning gains toward August’s $125,000 peak with overbought conditions accumulated over the last 12 months.
Bitcoin’s current price retreat is just 9.5% from all-time highs despite yesterday’s dramatic selloff, entering shallow correction levels compared to previous bull market rectifications. The cryptocurrency had only corrected 13% earlier in September following August’s peak, suggesting room for additional downside activity.
Bitcoin’s price history reveals a bumpy ride in September, with declines in eight out of the last thirteen years. Despite this, Bitcoin has managed to gain about 4% this month so far, showing some resilience compared to its historical September slumps.
Players now look towards “Uptober,” a period when Bitcoin traditionally demonstrates stronger performance since institutional inflows tend to increase during fourth-quarter portfolio rebalancing.
