400K Positions Erased As Crypto Market Sinks Under $4T

The crypto market has just endured one of its harshest shocks since the start of the year. In less than 24 hours, more than 407,000 positions were liquidated, wiping out over 1.5 billion dollars of bullish bets from order books. This quick correction, triggered by the domino effect of margin calls, shook the largest capitalizations while revealing the vulnerability of a market still dominated by leverage and massive speculative movements.

Serial liquidations : the shock mechanism

While crypto ETFs are increasingly attractive , this Monday, September 22, was marked by an unprecedented cascade of liquidations. Indeed, 1.5 billion dollars of long positions were liquidated, including nearly 500 million on Ether (ETH) and 284 million on bitcoin (BTC).

The magnitude of the phenomenon caused an instant drop in many assets, with a decline of up to 9 % for ETH, i.e. 4,162 dollars, and nearly 3 % for BTC, which currently trades around 112,490 dollars. In this forced deleveraging context, the smallest capitalizations were the hardest hit.

This coordinated drop is largely explained by the massive use of leverage, a practice still very common among speculators. When prices fall, margin calls trigger the automatic sale of positions, which further fuels the drop. The main affected cryptos are :

• Ethereum (ETH) : down 9 %, nearly 500 M$ liquidated ;
• Bitcoin (BTC) : -3 %, 284 M$ of long positions wiped out ;
• Solana (SOL) : -4 %, more than 95 M$ liquidated ;
• XRP : -5.7 %, about 79 M$ removed ;
• DOGE : -10 %, more than 62 M$ liquidated in 24 h ;
• BNB, ADA, LINK : losses between 5 % and 11 % according to market data.

As a result, the total crypto market capitalization fell below 4 trillion dollars, signaling a brutal loss of confidence from leveraged investors.

Institutional withdrawal and suspicions on exchanges

Beyond market mechanics, another major phenomenon seems to have fed this instability: the gradual disengagement of institutional actors, notably crypto reserves.

This movement is illustrated by the case of Metaplanet, a listed Japanese company, considered a local equivalent of Michael Saylor’s Strategy. Highly exposed to bitcoin, the company now shows a 67 % drop in its valuation since its mid-June peak.

George Mandres, senior trader at XBTO, points out “that it seems the market needs a pause, some participants worry that the DAT trade is losing momentum and that no significant flow is expected in the short term”.

Meanwhile, accusations of manipulation emerge in crypto circles, pointing fingers at the major exchanges. Well-known commentator Marty Party states that “exchanges pocketed 631 million dollars on this purge of the perpetual contracts market. They will buy back their own crypto with these profits. That’s their strategy until regulation bans it”, he posted on X (formerly Twitter).

If these statements are not confirmed by legal elements at this stage, they reflect growing distrust towards centralized operators.

These events could eventually trigger a behavioral adjustment from investors, especially those who turned to cryptos in search of alternative returns. The drop in institutional demand, combined with suspicions of manipulation and extreme volatility, could durably slow down incoming flows into the market. Are we witnessing a mere technical correction, or the beginning of a structural disengagement of the crypto market?