Leverage and Widespread Economic Uncertainty Trigger $1.5 Billion Crypto Sell-Off

Within the past day, more than $1.5 billion in positions were liquidated across global cryptocurrency markets, largely due to a surge in volatility that impacted leveraged long trades on major tokens.

(ETH) and (DOGE) were at the forefront of the downturn, with ETH tumbling 9% to $4,075 and losing over 10% to reach $0.2403. (BTC), the top cryptocurrency by market capitalization, slipped by nearly 3% to $111,998 as bullish positions were rapidly unwound. During this timeframe, more than 407,000 traders had their positions forcibly closed, marking the largest liquidation event in recent months.

Risk remains concentrated in derivatives markets, where open interest in crypto futures exceeded $220 billion as of September 2025, according to Coinglass. This underscores the increasing prevalence of leveraged trades, especially in Bitcoin and alternative coins, which could intensify liquidation waves during sharp price movements. Experts point out that trading volume in Bitcoin perpetual futures now outpaces spot trading by eight to ten times, highlighting the speculative nature of current market activity.

This wave of liquidations unfolded amid rising macroeconomic uncertainty, despite a recent rate reduction by the Federal Reserve. CoinW’s chief strategy officer, Nassar Achkar, stated that "the trajectory of the market will heavily depend on upcoming economic indicators and signals from the Fed." Investors are paying close attention to U.S. PMI figures, jobless claims, and remarks from Federal Reserve Chair Jerome Powell for insights into future monetary policy. Meanwhile, Coinglass noted that Bitcoin’s present price range is surrounded by clusters of highly leveraged long and short positions, which could spark further turbulence if breached.

Historically, significant long liquidations have often marked panic-driven market bottoms, while mass short liquidations can precede sharp upward moves. The current scenario, however, features both types, with altcoins such as

(SOL), (ADA), and (BNB) also posting double-digit losses. Coinglass further reported that if Bitcoin drops to $104,500, total long liquidations could surpass $10 billion, while a surge above $124,000 might result in over $5.5 billion in short liquidations.

Given the prevalence of excessive leverage, traders are urged to remain vigilant. Analyst Luckshury explained that derivatives trading essentially pits traders against exchanges, making it crucial to identify price levels vulnerable to liquidations. Combining liquidation statistics with open interest and funding rate data can help manage risk in markets susceptible to abrupt swings. As the September derivatives cycle unfolds, the relationship between macroeconomic developments and leveraged trading will continue to play a central role in shaping market stability.

Source: [1] Why September 2025 Could Trigger Record Liquidations (https://beincrypto.com/september-could-face-new-liquidation-record/) [2] Ether, Dogecoin Lead $1.5B Liquidation Wipeout as Bitcoin (https://www.coindesk.com/markets/2025/09/22/ether-dogecoin-lead-usd1-5b-liquidation-wipeout-as-bitcoin-slips-below-usd112k)