The global crypto market experienced its worst liquidation event, reportedly between $8 billion and $10 billion, surpassing the $1.6 billion loss during the FTX crash and the losses seen during the COVID period.
Crypto liquidation occurs when an exchange forces a trader to sell their assets at a loss. This usually happens when a trader uses borrowed money (leverage) to trade, but their trade goes in the opposite direction, leading to large losses.
In the last 24 hours, almost all major cryptocurrencies have fallen sharply. Bitcoin (BTC), the leading cryptocurrency, dropped by 5%, while Ethereum (ETH) fell even more, losing 17.1%.
Other cryptocurrencies were hit harder, with Ripple (XRP) down 20.1%, Dogecoin (DOGE) down 18%, and Sui (SUI) losing 17.9%.
$10 Billion Crypto Liquidation Reported in a Single Day
The crypto liquidation heatmap by Coinglass shows that over $2.2 billion has been lost in the cryptocurrency market in the past 24 hours, affecting more than 700,000 crypto traders.
This drop is the worst single-day liquidation event ever, surpassing the $1.6 billion lost during the FTX collapse in 2022 and even the 2019/2020 Covid crash. This indicates a major sell-off across the market, likely caused by sharp price drops that forced traders with borrowed money to exit their positions.
Meanwhile, new information reveals that total crypto liquidations in the last 24 hours may have reached $10 billion.
Ben Zhou, the CEO of Bybit, questions the $2.2 billion liquidation figure, suggesting that actual losses could be between $8 billion and $10 billion. He mentions that Bybit alone experienced $2.1 billion in liquidations in 24 hours, much higher than the $333 million reported by Coinglass.
Zhou says this difference is due to API limitations, which restrict how much liquidation data exchanges can share in real-time.
The accompanying screenshot in his X post shows liquidation data from Bybit, breaking it down into long and short positions. The numbers suggest that Bybit’s records display significantly higher liquidations than those of third-party trackers.
Zhou also points out that other exchanges may limit their data reporting, which could mean the total market impact is much larger than currently reported figures.
Why Is the Crypto Market Dropping?
Growing trade tensions worldwide are the leading cause of the current drop in the crypto market. The U.S. has recently imposed a 25% tariff on goods from Canada and Mexico and a 10% tariff on Chinese imports.
In response, Canada has started its tariffs on U.S. products. Further restrictions against the European Union and BRICS nations might happen, especially if they create a new currency.
These geopolitical issues create economic uncertainty, increase inflation worries, and delay expected interest rate cuts. With investors feeling nervous, the unclear path toward lower interest rates puts pressure on riskier assets like cryptocurrencies.
Today’s crypto liquidation event of $2.2 billion (or potentially $8–$10 billion) shows a significant shakeout, affecting overleveraged traders and changing market conditions.
Usually, extreme liquidations can lead to two outcomes: a quick recovery as weaker investors leave, allowing demand to stabilize, or continued drops as investor confidence stays low.
READ MORE: 4 Blue Chip Made in USA Crypto Coins to Buy in February
