Bitcoin Crash Wipes Out $1 Billion in Leveraged Crypto Positions

TLDR

• Bitcoin dropped below $90,000 on January 20, 2026, triggering $1.09 billion in forced liquidations across crypto markets.
• Long positions made up 92% of total liquidations, with 183,066 traders affected in 24 hours.
• The largest single liquidation was a $13.52 million BTCUSDT order on Bitget exchange.
• Bitcoin futures saw $427 million in liquidations while Ethereum had $374 million in forced closures.
• The selloff coincided with President Trump’s tariff threats and rising Japanese government bond yields reaching record levels.

Bitcoin dropped below $90,000 on January 20, 2026, triggering over $1 billion in forced liquidations across cryptocurrency markets. The sudden price move caught traders off guard, with most positioned for continued price gains.

Data from CoinGlass showed 183,066 traders were liquidated over a 24-hour period. Total liquidations reached $1.09 billion across all crypto positions.

Long positions accounted for 92% of the liquidations, totaling $1.08 billion. Short liquidations were much lower at $79.67 million. This breakdown shows how heavily traders had bet on further price increases.

Bitcoin fell to $87,800 during late U.S. trading hours. The price later recovered above $89,000 during Asian morning hours. The 3% decline marked a shift from the previous week’s trading pattern near recent highs.

Liquidation happens when an exchange closes a trader’s leveraged position because they lack enough funds to keep the trade open. Exchanges automatically sell the collateral when prices move against highly leveraged positions. This creates a cascade effect as each liquidation pushes prices lower and triggers more margin calls.

Bitcoin and Ethereum Lead Forced Closures

Bitcoin saw $427.06 million in liquidated long positions. Ethereum followed with $374.47 million in forced closures. These two cryptocurrencies accounted for the majority of liquidation losses.

The largest single liquidation was a BTCUSDT order on Bitget worth $13.52 million. Major exchanges reported heavy losses across their platforms.

Hyperliquid recorded $132.39 million in long liquidations. Bybit had $91.35 million in forced closures. Binance saw $64.08 million in liquidations over a four-hour period.

High-profile traders suffered losses during the selloff. Machi Big Brother, a known crypto investor, experienced five liquidations in one day. His total losses reached $24.18 million.

Technical indicators showed market stress beyond falling prices. Most altcoins traded with a daily Relative Strength Index below 50, indicating ongoing selling pressure. The RSI measures momentum on a scale from 0 to 100, with values below 50 suggesting bearish sentiment.

Global Market Pressures Add to Crypto Volatility

The crypto selloff occurred as broader financial markets turned cautious. President Donald Trump renewed threats to impose tariffs on European nations that rejected his proposal related to Greenland. These comments unsettled investors and revived concerns about trade policy.

Japanese government bonds experienced a sharp selloff on January 20. The 30-year Japanese Government Bond yield jumped 25 basis points to 3.86%. The 10-year yield rose 8 basis points to 2.34%, both setting modern records.

Rising Japanese yields affect global markets because low Japanese rates have supported the carry trade for decades. Investors borrow yen at low rates to invest in higher-yielding assets, including cryptocurrencies. Higher yields make these positions more expensive to maintain, causing capital to flow back into Japan.

The World Economic Forum in Davos added to market uncertainty. Policy discussions at the annual event often create market volatility, especially for cryptocurrencies facing increased regulatory scrutiny worldwide.

The liquidations-to-open-interest ratio remained high across crypto markets, indicating widespread deleveraging. This ratio measures the share of open positions that were liquidated and typically spikes during periods of forced selling. Repeated liquidations drain investor capital, making it harder for traders to re-enter markets at lower prices.

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