Ethereum Traders Take the Biggest Hit in Crypto Liquidations
Ethereum traders experienced heavier liquidation pressure than Bitcoin traders during a sharp cryptocurrency market downturn on Thursday. Approximately $356 million in ETH positions were liquidated over 24 hours, compared with $298 million in Bitcoin positions.
The difference stands out because Bitcoin's market capitalization was more than five times larger than Ethereum's at the time. Relative to market value, Ether's liquidation figure was approximately $1.2 million for every $1 billion of market capitalization, compared with roughly $180,000 for Bitcoin. That translates to about six times the relative liquidation pressure for ETH.
Across the entire cryptocurrency market, liquidations reached $1.19 billion over the same 24-hour period. More than $1 billion came from long positions, meaning traders who had bet on prices rising. The largest individual liquidation was an Ether position worth nearly $20 million on Hyperliquid, a decentralized platform for leveraged trading.
Why Leveraged Crypto Positions Were Liquidated
Liquidation occurs when a trader's losses reduce the collateral supporting a leveraged position below an exchange's required threshold. The trading platform automatically closes the position to limit further losses and protect the funds backing the trade.
When many traders use leverage in the same direction, a sudden price move can trigger a chain reaction. Forced closures can add selling pressure during a decline, while liquidations of short positions can accelerate a rebound when prices move higher.
Ethereum fell more than 3% to approximately $2,490 during the sell-off, while Bitcoin declined around 1%. Other major tokens also recorded significant liquidation totals: Solana positions accounted for $71 million, XRP for $34 million and NEAR for $25 million. All remaining tokens combined contributed approximately $119 million.
The figures indicate that the sell-off affected a wide range of leveraged positions, although Ether accounted for the largest liquidation amount among the assets highlighted.
Interest Rate Expectations and Iran Tensions Pressure Bitcoin
Bitcoin fell from approximately $83,200 to a low near $80,400 late Thursday as financial and geopolitical developments weighed on risk appetite.
Minutes from the Federal Reserve showed that most officials expected another interest-rate increase before the end of the year. Higher interest rates can pressure risk-sensitive assets by increasing borrowing costs and making interest-bearing investments more attractive.
At the same time, reports that the Pentagon was preparing for renewed combat in Iran pushed oil prices higher. These developments added uncertainty to an already volatile market, contributing to the decline in Bitcoin and other cryptocurrencies.
The market had seen Bitcoin move between roughly $83,000 and $87,000 throughout the week. That trading range encouraged leveraged positioning, leaving traders exposed when prices broke lower. The resulting liquidations intensified the pressure on long positions.
Justin Drake’s Cryptography Warning Adds to Market Anxiety
Ethereum researcher Justin Drake also raised concerns about the possibility that advances in mathematics and artificial intelligence could threaten the cryptographic systems protecting cryptocurrency wallets sooner than previously expected.
The warning added another source of uncertainty for traders already responding to macroeconomic and geopolitical developments. However, the available information does not establish that the warning directly caused the liquidation wave.
For Ethereum users, the discussion concerns the long-term security of wallet signatures and the potential need for stronger cryptographic protections. For short-term traders, the episode illustrates how technical concerns can emerge alongside economic news during periods of heightened volatility.
Bitcoin Rebounds as Short Sellers Face Liquidations
Bitcoin recovered to approximately $82,200 after President Donald Trump said the United States would not strike Iran before the midterm elections. The rebound put pressure on traders who had opened short positions expecting prices to fall further.
Over the previous four hours, approximately $25 million in crypto positions had been liquidated, with around 78% attributed to short sellers. During the most recent hour covered by the figures, short liquidations accounted for nearly $12 million of approximately $13 million in total liquidations.
These forced closures can help accelerate a price recovery. When a short position is liquidated, the platform may need to buy back the asset to close the trade, adding demand during a rebound. This process is often called a short squeeze.
Bitcoin's recovery followed its sharp decline from above $83,000, showing how quickly the balance between long and short liquidations can change when market sentiment shifts.
October 10 Flash-Crash Anniversary Returns to Focus
The market turbulence arrived one day before the anniversary of October 10, 2025, when cryptocurrency liquidations reportedly reached a record $19 billion in a single day. That amount was roughly 16 times Thursday's $1.19 billion total.
The anniversary added historical context to a market already experiencing substantial forced closures. However, the scale of Thursday's liquidations remained significantly below the previous year's reported record.
Bitcoin was trading around $82,200 after its recovery, approximately $800 below the $83,000 level where Thursday's selling began. Traders were left watching whether the rebound could continue or whether renewed selling would put pressure on the market again.
What the Liquidation Wave Reveals About Crypto Markets
The latest sell-off highlights how leverage can magnify losses even when the underlying asset is substantially smaller than Bitcoin. Ethereum's approximately $356 million in liquidations exceeded Bitcoin's $298 million total, while ETH also experienced a steeper price decline.
The broader market's $1.19 billion liquidation figure shows that bullish leveraged positions were particularly vulnerable during the downturn. Bitcoin's subsequent rebound then shifted pressure toward short sellers, demonstrating how quickly liquidation risks can change direction.
For market observers, the key figures are the $356 million in ETH liquidations, the $298 million in Bitcoin liquidations and the more than $1 billion in liquidated long positions. Together, they illustrate the role leveraged trading played in amplifying volatility across the cryptocurrency market.
