Crypto markets turned red overnight as Bitcoin slid below $110K, triggering a wave of forced unwinds that wiped out roughly $940M in leveraged crypto positions over 24 hours. The carnage was concentrated in BTC and ETH, with altcoins dragged into the rip current. The big question now: is this a reckoning, or the setup for a rebound?
The breakdown: How $940M liquidated crypto rocked Bitcoin and Ethereum
Liquidations hit across majors, but the heaviest damage landed where the leverage was densest. Fresh tallies show ETH traders took about $320M in forced unwinds, while bitcoin-linked liquidations came in near $277M. SOL, XRP, and DOGE combined added tens of millions more to the flush, underscoring the scale of this leveraged liquidation crypto event. That distribution squares with the weekend’s rotation into ETH beta and the subsequent unwind once price momentum snapped.
At the top level, multiple desks pegged the 24-hour liquidation total near $900M–$940M as BTC slipped through psychological support and ETH fell harder on a percentage basis, fueling the day’s ETH crash news headlines. That aligns with market dashboards and same-day reporting.
Why below $110K matters
Numbers on a screen become tripwires in derivatives markets. $110K has operated as a clean line in the sand for systematic strategies and discretionary traders alike-slicing below it triggers algo selling, reduces order book depth, and forces deleveraging on platforms where collateral marks-to-market. Once the level gave way, BTC tagged the high-$109Ks intraday, amplifying the liquidations cascade.
The psychology is simple: sub-$110K emboldens shorts, stresses over-margined longs, and cues volatility sellers to hedge, often at the worst moment, creating a reflexive downdraft that doesn’t need much spot selling to accelerate.
Macro squeeze + fragile liquidity
The backdrop wasn’t friendly. Spot Bitcoin ETFs have registered a run of net outflows in recent sessions, reversing prior inflows and draining passive bid support at the margin. Ether funds also bled capital late last week. Meanwhile, ETF trading volumes cooled, and options desks priced in bigger swings. Together, those flows point to a more fragile liquidity regime where sharp moves travel farther.
Microstructure tells the same story. Recent research and desk notes highlight thin order books on weekends and during macro event run-ups; even modest flows can push prices disproportionately. Asia-based QCP Capital framed prior bounces as “thin-liquidity” surges in strength, which can fade quickly when real demand isn’t there.
None of this means institutions have vanished. Banks note that corporate and ETF demand for ETH has been building and that allocations remain a medium-term tailwind, evidence that accumulation continues beneath the volatility, even as near-term flows wobble.
What traders are saying (and seeing)
Volatility regimes have been shifting. Earlier in August, implied vol (Deribit’s DVOL) jumped off multi-year lows, a classic tell that bigger moves were coming. Into this break, options flow skewed toward downside protection, and realized swings followed. Rising BTC and ETH vol confirms the leverage reset is in motion.
Desk chatter also emphasizes how quickly over-leverage unwinds once key levels give way: funding cools, open interest bleeds, and liquidation clusters get “vacuumed” in chunks, all visible in the last 24 hours’ liquidation maps and OI drops.
“Traders echoed that sentiment. A desk note from Derixe.xyz highlighted how the sell-off was ‘the result of overleveraged positioning following ETH’s recent run-up, compounded by an overnight dip in the S&P 500 that pressured risk assets more broadly.’ In other words, crypto’s tumble wasn’t happening in a vacuum; it was magnified by fragile positioning and macro headwinds.”
source: Coindesk
What’s next on the watchlist
- Key supports: Traders are eyeing the $105K-$100K zone for BTC as the next high-confluence area (prior acceptance, options interest pockets, and round-number psychology). Slice cleanly through $105K and the market likely tests $100K to probe real demand.
- Bounce catalysts: A turn in spot ETF flows back to net inflows, calmer macro headlines, or a volatility crush after options expiries could fuel an oversold snapback. Watch how price behaves on first tags of $108K-$110K-failed breakdowns, there often trap late shorts.
- Risks: If ETF outflows persist and macro prints sour (e.g., hotter inflation, dollar bid), leverage can reload on the wrong side, inviting another forced-selling leg. Thin weekend books remain a known hazard.
Conclusion
With $940M liquidated crypto in a single day, and Bitcoin surrendering $110K, the sea looks rough, but seasoned traders know that sharp washouts often pave the runway for big comebacks. This feels less like “the end” and more like the end of complacency. Whether it becomes a deeper correction hinges on flows: do ETFs and spot buyers step back in, or does macro keep the tide out?
Did you get caught in the liquidations, or did you HODL? Drop your battle scars or bounce plan in the comments!
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Source: https://www.cryptopolitan.com/bitcoin-below-110k-is-crypto-turning-rough/
