Bitcoin‘s sudden drop from above $112,000 to below $106,000 triggered more than $1.27 billion in liquidations across the futures markets. It was a major blow to the crypto market, with Ethereum and Solana also taking heavy hits.

Bitcoin Drags the Market Down

According to data from CoinGlass, long positions were hit the hardest: nearly 90% of all liquidations came from traders betting on rising prices. In total, more than $1.14 billion in bullish positions were wiped out, while shorts accounted for roughly $128 million.

The largest individual liquidation occurred on HTX (formerly Huobi), where a $33.95 million BTC-USDT long was closed. However, most of the liquidation volume was recorded on Hyperliquid, with $374 million in forced closures, followed by Bybit ($315 million) and Binance ($250 million).

Liquidations happen when traders use borrowed funds (leverage) and the market moves against them. Once their margin drops below the required level, the exchange automatically closes the position to prevent further losses. When many positions are liquidated at once, it can trigger a so-called cascade, where price declines accelerate rapidly.

Short-Term Pressure, but Also Opportunity

The recent “flush” followed Bitcoin‘s rejection above $113,000, combined with thin trading volumes during late-night hours. This amplified price swings and intensified the liquidation wave. Such moments often act as a market reset: excessive leverage is flushed out, allowing new buyers to gradually step back in. However, volatility is likely to remain elevated for now, especially as traders await the upcoming interest rate decision from the U.S. Federal Reserve later this week.

Altcoins also came under pressure, with a combined total of more than $300 million in liquidations — including losses for Ethereum and Solana. Overall, the market appears to be in a cooling phase, as traders remain cautious and focus on better managing risk.

Disclaimer: This article does not constitute financial advice. Always conduct your own research and consider seeking professional guidance before making investment decisions.