The crypto market faced5 a brutal correction, with nearly $967 million in derivatives positions wiped out within 24 hours. As altcoins plunged sharply, Bitcoin remained comparatively stable — a possible sign of capital rotation during turbulent conditions.
$967 Million Liquidated — Most from Long Positions
According to data from CoinGlass, crypto traders saw a staggering $967 million in liquidations, with $829 million coming from long positions. This indicates that the majority of the pain was felt by traders betting on rising prices — especially in altcoins like XRP and Dogecoin, both of which dropped around 10% during the correction.
While the altcoin market bled, Bitcoin (BTC) showed resilience, fluctuating within a tight range between $117,422 and $119,197, ultimately settling at $118,578. This relative stability has analysts speculating that investor capital is rotating away from altcoins and back into Bitcoin, which historically acts as a safer haven during volatile market phases.
Ethereum Leads Liquidations — Followed by XRP and Solana
Liquidation data reveals that Ethereum (ETH) bore the heaviest losses with approximately $200 million in liquidated positions. Other major tokens followed:
- XRP: $115 million
- Bitcoin: $84 million
- Solana: $58 million
- Dogecoin: $56 million
These figures highlight how over-leveraged derivatives markets across altcoins triggered a cascading liquidation effect as prices dropped.
Bitcoin Market Cycle Remains in Distribution Phase
Insights from CryptoQuant analyst Gaah suggest that Bitcoin’s current cycle phase is in the “Distribution” zone, as indicated by the Index Bitcoin Cycle Indicators (IBCI). This phase typically marks the late stages of a bull market, but the current readings are still moderate — reaching only 80% of the upper threshold, which means that market overheating hasn’t fully materialized.
Two critical indicators remain subdued:
- Puell Multiple: Hovering near the “Discount” range, suggesting moderate miner profitability.
- Short-Term Holder Spent Output Profit Ratio (SOPR): Still under key levels, signaling that aggressive short-term speculation is yet to emerge.
These signals imply that Bitcoin has not yet entered the excess euphoria phase, and the network fundamentals remain relatively healthy.
Leverage Explosion Drove Market Fragility
A deeper look at open interest data from Glassnode shows that the combined leverage in top altcoins has doubled since early July. Open interest across Ethereum, Solana, XRP, and Dogecoin grew from $26 billion to $44 billion — a significant rise that laid the groundwork for the recent cascade of liquidations.
The sharp uptick in leveraged trading made the market vulnerable. As prices dipped, margin calls and forced liquidations accelerated, intensifying the drop.
Support Holds at Realized Price for Recent Buyers
Another CryptoQuant analyst, Amr Taha, noted that Bitcoin has maintained strong support around $118,300, the realized price for short-term holders. This level reflects the average entry price of recent investors, and its resilience shows that newer participants have not capitulated.
Such behavior signals continued confidence in the current cycle, further reinforcing Bitcoin’s stability amid broader market uncertainty.
Conclusion: Altcoin Fragility Exposed, Bitcoin Steadies the Ship
The recent crypto liquidation event underscores how excessive leverage in altcoin markets can lead to sudden downturns. While Bitcoin remained steady, the crash in tokens like Ethereum, XRP, and Dogecoin reveals the risk of overexposure to derivatives in volatile environments.
With Bitcoin still in a measured phase of its cycle and altcoin leverage cooling off, market participants will be watching closely for the next major trend shift.
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