Crypto Market Sees $1.7 Billion Liquidated in Major Crash
The crypto market faced a significant crash on December 9, with Bitcoin's price dropping from $101,109 to as low as $94,150, a decline of -7%. Altcoins experienced even more severe losses: Ethereum fell by -12%, XRP by -22%, Solana by -15%, Cardano by -23%, Dogecoin by -19%, and Shiba Inu by -25%.
Data from Coinglass indicates that over 562,000 traders were liquidated within 24 hours, totaling $1.7 billion in liquidations. The largest single liquidation order was on Binance for the ETHUSDT pair, valued at $19.69 million. Of the total liquidations, $1.55 billion involved long positions.
Bitcoin’s leverage flush was modest compared to altcoins, with $143 million in BTC longs liquidated. In contrast, liquidations included $219 million for ETH, $57 million for SOL, $86 million for DOGE, $53 million for XRP, and $22 million for ADA.
This event marked the largest leverage flush since April 2021, surpassing the previous record of $5.77 billion when $10 billion in crypto futures liquidations occurred in one day.
Post-crash, Bitcoin and most altcoins showed a sharp recovery but remained below pre-crash levels. Over the last 24 hours, BTC was down by -2.4%, ETH by -4.8%, XRP by -9.6%, SOL by -6.4%, and DOGE by -8.4%.
What Caused The Crypto Market Crash?
Crypto analyst ltrd identified increased selling pressure on Coinbase as a precursor to the crash, with aggressive selling occurring nearly an hour before the major decline. This initial selling created conditions that forced overleveraged traders to unwind their positions due to the resulting price drops.
He noted that overheated funding fees and rising open interest levels left heavily leveraged positions vulnerable once the selling began. The combination of these factors indicated an overheated market, contributing to the rapid sell-off.
During the crash, Bitcoin exhibited distinct characteristics compared to other assets, while Ethereum displayed signs of accumulation, suggesting a major buyer might have been capitalizing on lower prices.
Remarkably, XRP saw unusual activity on Coinbase, where large sell orders led to significant price drops. Ltrd suggested these orders may have originated from a major player forced to liquidate quickly, resulting in a swift market crash that affected perpetual swaps trading and triggered further liquidations.
Ltrd explained that such events typically result in unintended order cascades, with market makers absorbing the selling pressure. Despite having substantial market caps, large-cap altcoins like XRP still face liquidity constraints that become evident during high-stress situations.
As prices stabilized and began recovering, ltrd emphasized this pattern is common in overheated markets, observing quick reversals following significant liquidations, limited liquidity, and profit-taking by players looking to buy dips.
Macro analyst Alex Krüger provided broader context, stating expectations for future price increases remain unchanged. He mentioned potential supportive conditions for digital assets under a pro-crypto US administration and viewed upcoming leverage flushes as a normal aspect of volatile markets.
At press time, Bitcoin traded at $97,401.
