Crypto markets experienced massive liquidations exceeding $1.5 billion on Monday, triggering a significant sell-off that particularly impacted altcoins. Ethereum (ETH), the second-largest cryptocurrency, dropped nearly 9% to $4,075 as approximately $500 million in long positions were liquidated according to Coinglass data. Bitcoin (BTC) declined almost 3% to $111,998 before showing minor recovery.
Dogecoin (DOGE) led the downturn with over 10% losses among major cryptocurrencies. Solana (SOL), Cardano (ADA), BNB Chain (BNB), and Tron (TRX) all recorded minimum 5% declines within 24 hours. Coinglass reported more than 407,000 traders facing liquidations during this period, marking the highest liquidation event in recent months.
Liquidation events occur when leveraged positions are forcibly closed due to price movements exceeding margin requirements, often resulting in substantial losses and creating cascade effects during market volatility. Traders utilize liquidation data to assess market sentiment and positioning, with large long liquidations frequently indicating panic selling bottoms.
The liquidation wave emerges amidst ongoing macroeconomic uncertainty despite the Federal Reserve's recent interest rate cut. Market analysts emphasize that upcoming economic data and Federal Reserve signals will critically influence market direction, potentially maintaining Bitcoin's dominance while limiting upside for Ethereum and DeFi sectors despite their yield advantages.
Investors are closely monitoring upcoming U.S. PMI data, jobless claims, and Federal Reserve Chair Powell's scheduled speech, which could significantly impact risk appetite and altcoin performance following recent substantial losses.