In a stunning turn of events, the cryptocurrency markets were rocked by a severe liquidation crisis as over $360 million worth of long positions vanished into thin air. Bitcoin, the crypto giant, plunged below $116,000, while Ethereum dropped beneath the $4,300 mark, marking a turbulent moment for traders just days after Bitcoin reached an all-time high of $124,457. This wave of liquidations is a stark reminder of the cryptocurrency market’s inherent volatility and the risks involved in trading with leverage.
😲BREAKING: Over $100m in long positions were just liquidated in the past hour!This as Bitcoin falls below $116k & ETH below $4.3k. Rough week ahead? pic.twitter.com/dLBeH3of4o— Coin Bureau (@coinbureau) August 18, 2025
This staggering liquidation event impacted a staggering 116,598 traders within a short 24-hour window, driving total liquidations to an eye-watering $464.30 million, as reported by major exchanges. Ethereum faced the hardest hit with $89 million wiped out in long positions, followed closely by Bitcoin’s own $80 million. The sell-off escalated notably during U.S. market trading hours, with over $125 million disappearing in a single hour. A recent inflation report—showing a July Producer Price Index increase of 3.3%—combined with Treasury Secretary Scott Bessent’s surprising statement that “the U.S. will not be buying any Bitcoin,” significantly darkened market sentiment.
🚨 BREAKING NEWS 💥 116,598 traders were liquidated, the total liquidations come in at $464.30 million ✍️📉$BTC Manipulation to liquidate longs. pic.twitter.com/yJ2m64jgv5— Crypto Seth (@seth_fin) August 18, 2025
The cryptocurrency market is no stranger to such volatility, especially during the transition from summer into fall. Historically, August and September have been challenging months for Bitcoin, with the currency suffering declines in eight of the past twelve years during this timeframe. As the market absorbs critical economic announcements and Federal Reserve meetings, these months are often marked by increased volatility. The latest liquidity crisis appears to align with familiar trends—where the excitement of summer rallies leads to significant profit-taking and systematic flush-outs in late summer. Notably, there’s more than $6 billion in short positions that could be liquidated if Bitcoin breaches the $124,000 threshold, while approximately $2 billion in Ethereum longs remain precariously positioned if prices dip below $4,200.
$6 BILLION in shorts will be liquidated when $BTC hits $124K. 🚨 pic.twitter.com/7LoYmQ7NqD— Crypto Rover (@rovercrc) August 18, 2025
In decentralized finance (DeFi) circles, platforms like Aave and Compound have witnessed their automated liquidation mechanisms kicking into action, further intensifying the selling pressure. As positions were automatically liquidated via smart contracts, the absence of centralized interventions led to a compounded effect on market downturns, as algorithm-driven trading systems reacted to technical breakdowns. Recent data reveals that over 67% of liquidation events were from long positions—indicative of the overwhelmingly bullish sentiment before the market slew. The collateral damage included a single position on the ETH-USD pair being liquidated for as much as $9.43 million.
Interestingly, amid this apparent chaos, there are signs that institutional players might be positioning themselves for a rebound rather than a market collapse. Technical analyses conducted over the weekend showed that Bitcoin somewhat stabilized around the $117,000-$118,000 mark, indicating that buyers are still present despite the shakeout. Notably, this pattern of selling seems orchestrated—a phenomenon highlighted by Bitcoin’s slight resistance during the weekends compared to significant drops when U.S. markets reopened. Such trends suggest that the selling pressure witnessed is not merely a result of retail panic but rather the activity of larger institutional players.
Furthermore, liquidity analysis has identified a critical zone between $116.8K and $114.7K—within which Bitcoin is currently oscillating—suggesting that many of the overleveraged long positions have now been liquidated. This process could pave the way for strong reversals once the cascade of liquidations has subsided. The intricacies of this mass selling episode may indicate that the market is not nearing a ceiling but rather preparing itself for upward movements ahead.
$BTCAs always, market follows liquidity.https://t.co/0kpznYNZkF pic.twitter.com/qWirUcRnC1— Killa (@KillaXBT) August 18, 2025
With hedge funds reportedly ramping up short positions in Ethereum to record highs, the potential for a short squeeze could become a crucial development if market conditions change. Traders eyeing these positions closely might find that the pendulum can swing rapidly in either direction, especially given the nature of these markets.
🚨 JUST IN: WALL STREET HEDGE FUNDS ARE SHORTING ETH THEIR NET SHORT POSITIONS JUST HIT A RECORD HIGH THE MOTHER OF ALL SHORT SQUEEZES IS COMING pic.twitter.com/JLaysZAtcD— Rekt Fencer (@rektfencer) August 18, 2025
So what does the future hold? If technical indicators are anything to go by, support levels hover around $114,700. Should Bitcoin manage to sustain this level, it could signify that the deleveraging process is nearing its end. However, a breach below this could trigger further liquidation events. Observing the technical structure alongside institutional positioning, it seems likely that Bitcoin will test the $114,700 support before heading back towards previous highs. This peculiar auction process of liquidation may serve as a necessary reallocation of positions, setting the stage for another major move rather than indicating a definitive market peak.
In this volatile landscape, it’s not just about watching the numbers; it’s about understanding the context behind those movements. Engaging with these narratives will not only equip traders with better strategies but also offer insights into potential market dynamics. Make sure to keep a keen eye on upcoming developments in the crypto space as the story unfolds!