The cryptocurrency market faced one of its largest sell-offs of the year, with over $1.8 billion in liquidations recorded in just 24 hours. This sudden wipeout has left traders questioning whether the event marks the final flush before a recovery—or if the downturn is set to continue.
Record Liquidations Shake the Market
According to data from CoinGlass, more than 370,000 traders were liquidated, with losses totaling $1.8 billion. Bitcoin (BTC) and Ethereum (ETH) accounted for the majority of these positions, though altcoins were also heavily impacted.
The market correction erased more than $150 billion in total market capitalization, driving the overall value of cryptocurrencies to $3.95 trillion, its lowest level in two weeks. Bitcoin dropped below $112,000, while Ethereum fell under $4,150—their steepest declines since mid-August.
Technical Factors Drive the Sell-Off
Market analysts largely attribute the liquidations to technical factors rather than fundamental weaknesses. Raoul Pal, founder of Real Vision, explained that crypto markets often move in cycles where traders over-leverage in anticipation of a breakout. When breakouts fail, liquidations follow, typically before the market stabilizes.
CoinGlass confirmed that this was the largest long liquidation event of 2025, comparable to similar wipeouts earlier in February, April, and August. Each of those events saw rapid sell-offs, with spot markets losing hundreds of billions within hours.
Altcoin Leverage Intensifies the Downturn
A major factor behind the sell-off was the high level of leverage in altcoins. Researcher Bull Theory noted that Ethereum liquidations surpassed $500 million, more than double Bitcoin’s figure, due to excessive leverage compared with Bitcoin.
“When altcoin leverage reaches extreme levels, it can trigger a chain reaction of liquidations,” Bull Theory explained. “This leads to a broader market reset and clears out weaker positions.”
Outlook for Bitcoin: Correction or Bullish Continuation?
Despite the pullback, some experts believe this may be a short-term correction within a broader bull cycle. Nassar Achkar, Chief Strategy Officer at CoinW, pointed out that easing monetary policy and continued demand for risk-on assets support Bitcoin’s long-term bullish outlook.
Tony Sycamore, analyst at IG Markets, expects Bitcoin could dip further, possibly testing the $105,000–$100,000 range, with the 200-day moving average near $103,700. He suggested that such a correction would help eliminate weaker hands and create a stronger foundation for growth in the final quarter of 2025.
Historical Context: Bitcoin’s Resilience
Bitcoin’s current 9.5% decline from its all-time high is relatively modest compared to corrections in previous bull markets. Historically, September has been a weaker month for Bitcoin, while October—often dubbed “Uptober”—tends to deliver stronger performance.
Despite the recent volatility, Bitcoin still closed September with a 4% monthly gain, indicating that momentum may remain intact heading into year-end.
Conclusion: Market Reset or Opportunity?
The $1.8 billion liquidation event has rattled the crypto sector, but many analysts view it as a healthy reset rather than the end of the bull cycle. While short-term volatility and further corrections are possible, the long-term outlook for Bitcoin and major cryptocurrencies remains optimistic, with current dips potentially offering fresh entry points ahead of the next rally.
