The cryptocurrency market experienced a sudden and intense wave of liquidations exceeding $1 billion within a single hour.
Bitcoin and Ethereum, the market's two largest assets, saw their open interest rapidly unwind, signaling heightened volatility and deepening bearish sentiment.
Tweets from crypto analyst DaanCrypto reported that over $1 billion in open interest was wiped out in just five minutes, marking an accelerated market collapse unlike the typically slower downward trends seen recently.
This liquidation surge removed massive leveraged positions from both Bitcoin (BTC) and Ethereum (ETH) markets.
According to DaanCrypto, “This is the first time we actually see some acceleration and big liquidations in a single candle, instead of the orderly slow grind lower”.
Ethereum Slides Under $3,000, DeFi Treasuries Suffer Heavy Losses
The panic selloff pushed Ethereum below the critical $3,000 threshold, a key support level previously defended by traders.
Cointelegraph highlighted that this drop left decentralized autonomous treasuries (DATs) facing significant unrealized losses, unsettling many DeFi protocols heavily reliant on ETH holdings for funding and operations.
The tweets and reports warn that these losses are likely to hinder community spending and development, with some treasuries trapped by rigid governance rules that limit quick responses to price moves.
Fractal price analysis points toward a potential further test of the $2,500 zone—a level unseen since early 2023.
This looming possibility has many market participants bracing for more downside action as bearish momentum persists. “Price fractals hinting at a potential test of $2,500,” Cointelegraph reported.
The Ethereum price slide follows broader market declines with Bitcoin also sharply lower, amplifying fears of sustained bearish conditions.
Market Impact and Outlook
The mass liquidation event wiped out more than $1 billion in crypto futures and leveraged positions, predominantly affecting long traders who bet on rising prices.
This aligns with reports that long positions accounted for the vast majority of the liquidations, intensifying sell pressure.
The sudden spike in liquidations, particularly those occurring within minutes rather than over days, signals an urgent deleveraging in the market and increased volatility.
The impact is sending ripples through the DeFi ecosystem where treasuries are vulnerable, raising questions about the sustainability of protocol funding models reliant on volatile assets.
Analysts suggest traders monitor key macro factors, including Bitcoin’s price movements and broader economic signals, for indications of a market bottom or continued decline.