A sudden market cascade triggered $627.7 million in crypto liquidations in a single hour late Thursday, with $606.6 million coming from bullish long positions as panic spread over an unexplained $2 billion outflow from Binance hot wallets. The sell-off intensified after Binance confirmed it was investigating a potential security issue and co-founder Changpeng Zhao noted the activity "does look like a hack," though Binance began investigating the potential $2 billion security incident before official losses were verified.
Sharp Market Decline Wipes Out Leveraged Longs
The market drop occurred rapidly following the initial on-chain movement. The first transfer out of the Binance 14 wallet was logged at 20:24 UTC, causing heavy selling across major assets over the subsequent 15 minutes.
- Bitcoin (BTC) dropped nearly 3% from $80,800 at 20:00 UTC down to $78,300 by 20:35 UTC, before rebounding above $79,100.
- Ethereum (ETH) suffered a steeper loss of over 4%, falling from $2,335 to a low of $2,233 before recovering to $2,263.
- Over a 24-hour period, 161,647 traders were liquidated for $951.2 million, with two-thirds of that total occurring in the final hour.
- Short sellers lost just $21.1 million during the hour-long collapse.
Liquidations Breakdown Across Exchanges
Data from Coinglass shows that Bitcoin led total forced closures at $189.1 million, followed closely by Ethereum at $156.8 million and Solana (SOL) at $46.8 million. The largest single liquidation event took place on Binance, where an $11.09 million BTC long position was forcibly closed at $79,254.
Binance recorded the highest volume of liquidations among exchanges at $344.8 million, representing over half of the hourly total. Decentralized exchange Hyperliquid followed with $97 million, while Bybit saw $77.3 million in wiped-out positions. This hour-long unwind was three times larger than the $200 million cascade seen when Bitcoin dropped below $80,000 the previous Saturday. Downside panic was partially mitigated as Tether froze more than 1.567 billion USDT connected to the suspicious address.
Why It Matters
This massive liquidation spike highlights how sensitive crypto derivatives markets remain to centralized exchange security concerns. While stablecoin freezes by issuers like Tether prevented direct market dumping of stolen funds, automated risk systems on leveraged venues executed immediate forced liquidations regardless of underlying asset solvency.
Traders should monitor whether Binance completes its technical audit without confirming additional net asset losses, as market leverage has been thoroughly reset following the near-$1 billion 24-hour wipeout.
