Crypto Crash: $19.5 Billion Wiped Out In Record-Breaking Liquidation Event

The crypto market experienced a major downturn, with over $19.5 billion in leveraged positions erased within 24 hours. This marked the most chaotic period in crypto history, triggered by unexpected US tariff announcements on China.

Bitcoin had a $20,000 daily price swing, losing $380 billion in market capitalization.
A total of 1.6 million traders were forced out of their positions.
Total liquidations reached $19.5 billion, with $16.7 billion from long positions—a 6.7-to-1 ratio compared to shorts.
The event surpassed previous records, including the FTX collapse and March 2020 crash.
Major exchanges such as Binance and Bybit saw over 90% of liquidations affecting long positions, with Hyperliquid alone recording $10.3 billion.

Causes of the Crash

The crash was influenced by Bitcoin's recent all-time high and geopolitical tensions due to new US tariffs on China.
Large Bitcoin holders began selling off prior to Donald Trump's tariff announcement, contributing to the market instability.
At 4:30 PM, a whale opened multi-million-dollar shorts, followed by Trump's official tariff announcement, exacerbating the situation.
By 5:20 PM, total liquidations hit $19.5 billion, with the whale making a $192 million profit.

The Kobeissi Letter noted that this event was technical rather than fundamental, suggesting the crash was a necessary market reset without long-term implications. A potential trade deal between the US and China could stabilize the uncertainty, and the crypto market remains resilient.

Currently, Bitcoin has partially recovered and is trading at $111,790.