Bitcoin and Ethereum sharp plunge causes record $1.7 billion liquidation to start week

Crypto prices tumbled hard during Asian trading hours, wiping out nearly 4% of the market’s capitalization in a single session.

Bitcoin drove the downturn, falling by more than $4,000 in the past day to hover near $112,000 at press time, according to CryptoSlate’s data.

Meanwhile, the decline was not limited to BTC as Ethereum slid 7% to $4,163, while XRP lost over 6% to trade around $2.82.

Other large-cap tokens, including Solana, Dogecoin, and BNB, also registered more than 6% declines during the same window.

The broad downturn marked the first major correction after weeks of steady gains that had driven digital assets to record highs.

The speed of the drop caught some traders off guard, but several analysts had already highlighted potential risks.

Joao Wedson, founder of blockchain analytics platform Alphractal, said Bitcoin is showing clear signs of cycle exhaustion. He pointed to the SOPR Trend Signal, which tracks realized profitability on-chain, as evidence that investors are buying at historically high levels where profit margins are already shrinking.

Wedson explained that Bitcoin’s short-term holder realized price currently sits at $111,400, a level that institutions should have secured much earlier. He also noted that Bitcoin’s Sharpe Ratio, which is used to measure returns against risk, has weakened compared to 2024.

Considering this, he stated:

“Those who bought BTC at the end of 2022 are happy with +600% gains, but those accumulating in 2025 should reconsider their strategy.”

$1.7 billion liquidation

The sudden price correction has sparked the largest liquidation event of the year.

Data from Coinglass shows that $1.7 billion worth of leveraged positions were wiped out in the past 24 hours, with long traders taking the heaviest hit. Losses from bullish bets totaled $1.6 billion, while short positions lost $83 million.

Ethereum traders endured the most pain, with $498 million in liquidations, followed by Bitcoin at $284 million. XRP and Solana also saw positions worth $78 million and $95 million liquidated, respectively.

These figures underline the inherent volatility of crypto markets. When leverage builds up during bullish runs, a rapid correction can wipe out billions in unrealized gains.

So, this sharp reset highlights why traders, particularly institutional entrants, remain cautious about the emerging industry even as adoption grows.

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