$9.4B in liquidations over 24 Hours triggers ‘2021 type situation for altcoins’
There may be no crying in the casino. But on days like these, you’d be forgiven for shedding a tear. With $9.4 billion liquidated in a single day in the crypto market, the flash crash comes just in time to punch the late-coming retail crowd in the face.
In a single 24-hour span, crypto traders witnessed one of the biggest liquidation cascades since the heydays of 2021; a moment that rechristened “risk” for an entire generation.
The crypto market gets nuked
Of the $9.4 billion in liquidations over the last 24 hours, more than $6 billion in leveraged positions were wiped out in less than one hour. As Stock Market News commented:
“We just witnessed history.”
Bitcoin plummeted as much as 12% and, in typical fashion, altcoins fared even worse.
Why the sudden wipeout? One word: tariffs. The cascading selloff coincided with President Donald Trump’s announcement of aggressively expanded tariffs on China. His rhetoric, whether or not it comes to pass, roiled markets globally and snowballed into a broad risk-off episode.
For an industry long accustomed to outsized moves, it was a powerful reminder that crypto is still at the mercy of macro, and when the world’s two largest economies volley threats, digital assets don’t simply wobble, they implode.
PTSD: altcoin traders relive 2021
If parts of this seem familiar, they should. The magnitude and velocity of the selloff evoked 2021’s grand altcoin reckoning, when exchange overloads, cascading stop-losses, and unbalanced leverage left traders scrambling for cover.
Those seeking a safe haven were left sorely disappointed: many exchanges struggled under the deluge, with reports of brief outages and slippage on even the most liquid pairs. The brutal crypto market crash led Wolf of All Streets’ Scott Melker to comment:
“Seems somewhat guaranteed that a major market maker blew up today. Wouldn’t be surprised if an exchange quietly went insolvent today as well. This was a 2021 type situation for altcoins.”
Gold soars, Bitcoin sinks
As crypto stumbled, gold grabbed the spotlight. On the same day, gold, a classic safe haven, surged to all-time highs, leaving some investors scratching their heads. After all, didn’t JPMorgan just bundle Bitcoin and gold together in the ‘debasement trade’? Didn’t mainstream media declare Bitcoin’s haven status?
Yet here we are: gold rallies while Bitcoin dumps, drawing a bright line under just how far crypto still has to go in earning “safe haven” status.
Not everyone fared badly during the crash. One opportunistic trader opened a huge short position just 30 minutes before Trump’s tariff announcement and closed it with an $88 million profit: all from an account opened that very same day. That’s a ratio of timing the market versus time in the market to go down in history books.
Putting it in perspective
Perspective matters. This liquidation dollar amount is eye-watering, but so too is the scale of today’s crypto market. This may be the biggest ever liquidation the crypto market has seen, but to borrow logic from the wise man, Homer Simpson, for a moment: it’s the biggest ever liquidation the crypto market has seen – so far. Bigger will surely come.
It’s essential to keep the figure in context, as a percentage of the total market cap. The industry has ballooned since 2021, so while the shock feels biblical, in proportional terms, it may not be as catastrophic as the numbers initially suggest.
Use the events of the past 24 hours as a learning moment. Volatility, leverage, and geopolitics remain a potent and potentially explosive cocktail for digital assets. Stay humble stack sats, and maybe resist the urge to get Grandma trading perps.
The post $9.4B in liquidations over 24 Hours triggers ‘2021 type situation for altcoins’ appeared first on CryptoSlate.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Credit panic hits AI trading: CoreWeave bond yields remain high, Nasdaq posts biggest weekly drop since late June
Concerns over the debt risk of AI infrastructure companies continue to rise. Yields on some CoreWeave bonds briefly exceeded 15% on Thursday and remained elevated on Friday. CoreWeave's stock price plunged another 12% on Friday, and the Nasdaq Composite Index fell about 4.5% for the week. Analysts point out that as capital costs rise to unbearable levels, companies will have no choice but to reduce their capital expenditures.
Philadelphia Semiconductor Index Experiences Longest Losing Streak Since 2008; Jensen Huang Responds Calmly: Short-term Fluctuations Won't Change AI's Long-term Growth Prospects
Despite recent sell-offs in AI-related stocks, Nvidia CEO Jensen Huang remains confident in the long-term prospects of the AI industry.
U.S. chip stocks drop for eight consecutive sessions! $2 trillion wiped out in market value, marking the longest losing streak since 2008
This week, the investment prospects of AI were questioned by the market. The Philadelphia Semiconductor Index fell by 11.4%, and the Nasdaq dropped more than 4% in a single week. CoreWeave's stock price fell over 25% during the week, and its bonds dropped to distressed levels, casting doubt on the high-yield debt financing model. Strategists warned that being overly bearish could lead to missing opportunities, while "Wood Sister" bucked the trend and increased her holdings of CoreWeave.
In August, overseas funds returned to the U.S. Treasury market; UK holdings surpassed $1 trillion for the first time; Japan and China continued to reduce holdings, with China’s U.S. Treasury holdings hitting the lowest level since 2008
According to a report by the U.S. Treasury Department, overseas investors made net purchases of $108.9 billion in U.S. Treasury bonds in August, reversing a two-month decline in holdings. Among the top ten countries and regions holding U.S. debt, only China and Japan reduced their holdings in August. Japan, the largest holder, saw its holdings drop for the fourth consecutive month, reaching a 22-month low in the same month it intervened in the foreign exchange market. China’s holdings declined for the third straight month, hitting new lows for two consecutive months not seen since 2008. The UK, the second-largest holder, posted historic highs for two consecutive months. Canada recorded the largest increase in August, up $38.3 billion, ranking fifth overall. Belgium had the second-largest increase, up $19.8 billion.
Crypto prices
More
