$1.7B Liquidations Pile Up as Bitcoin Slips, Pulling Crypto Market Down 2%

Jimmy Aki
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The cryptocurrency market lost ground on September 23, with its total market capitalization falling 2.18% to about $3.88 trillion as Bitcoin slipped toward $112,000, erasing its weekly gains.

The decline triggered roughly $1.7 billion in liquidations, deepening the sell-off as leveraged trades unwound across major exchanges

According to data from CoinMarketCap, Bitcoin fell 2.49% to $112,253. Other major digital assets also slumped. Ethereum dropped 2.88% to $4,117, BNB fell 5.15% to $981.78, and Solana slid 7.02% to $216.05.

Over 370,000 Traders Liquidated as BTC, ETH, and Altcoin Bets Collapse

Derivative data from CoinGlass reveals that more than 370,000 traders were liquidated within 24 hours, with long positions accounting for nearly all of the $1.7 billion in losses.

CoinGlass describes the event as one of the largest long liquidation events of the year, comparable to similar sell-offs in late February, early April, and early August, when spot markets shed hundreds of billions in a matter of hours.

The latest downturn follows a period of optimism. Farside Investors ETF tracker revealed that deposits into crypto funds had been strong, with spot Bitcoin ETFs attracting $886.5 million last week.

Spot Ethereum ETFs also recorded $557 million in inflows. This marked a sharp reversal from early September, when nearly $400 million was pulled from Bitcoin and Ether ETFs.

Macroeconomic conditions also appeared favorable. Just last week, the Federal Reserve cut interest rates by 25 basis points, lowering its target range to 4.00%–4.25% and hinting at two more cuts later this year.

However, sentiment shifted on September 20 when the defunct crypto exchange FTX confirmed it would begin its third distribution on September 30.

About $1.6 billion in crypto will be returned to creditors as part of its Chapter 11 restructuring.

The news prompted caution among traders, contributing to the slide of Bitcoin and the broader cryptocurrency market.

Analysts See Crypto Market Decline as a Potential Breakout Signal

Despite the short-term pain, some analysts interpret the liquidation event as a necessary market reset. Researcher Bull Theory described the plunge as the result of an excessive imbalance in leverage. For instance, Ethereum liquidations exceeded $500 million (double those of Bitcoin), indicating a buildup of speculative positions.

Real Vision founder Raoul Pal offered a similar perspective. He noted that this pattern repeats across cycles. The crypto market often leans heavily into a breakout narrative, with traders piling into leveraged long positions.

The rally fails on the first attempt, positions are liquidated, and only afterward does the true breakout occur, leaving sidelined investors watching from the outside.

Longer-term projections for the BTC price echo this interpretation. Coinbase CEO Brian Armstrong recently predicted that Bitcoin could reach $1 million by 2030.

He pointed out that most large funds currently allocate just 1% of their portfolios to BTC. With clearer regulatory frameworks, he believes institutional adoption will expand.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.