Over $489 million in long positions were closed by force as Bitcoin and Ethereum fell further, extending a chain of deleveraging across the crypto market. Outlines cascading liquidation waves that hit leveraged traders, treasuries with derivatives, and futures order-book depth. The mechanics of automatic liquidations, thinning liquidity, and rising funding costs amplified losses across venues trading around the clock.
The $489 million figure forms one link in a broader deleveraging chain that affected leveraged traders and treasuries while eroding futures-book depth. As prices slid, forced sales accelerated closures and transmitted stress across markets reliant on margin and derivatives.
Scale and timeline of the liquidation waves
On 8 October 2025 Bitcoin fell below $121,000, triggering more than $500 million in long closures within twenty-four hours; the day’s total across all assets reached $659 million. Ethereum had set a precedent on 25 September by dropping under $4,000 and erasing $400 million in futures.
Concentrated damage, including a single-account loss of $36.4 million, and larger bursts such as $1.5 billion in closures on 22 September and $1 billion in Bitcoin longs during one hour on 21 September.
Forced sales push prices lower and spark more closures, creating feedback loops that intensify volatility. Each liquidation wave compounds the next as margin thresholds are breached and positions are closed en masse.
Derivative platforms cut exposure to keep debt collectible, yet volatility drains order-book depth and lifts perpetual funding rates, making conditions harsher for participants relying on leverage. Liquidity thins precisely when it is most needed, widening slippage and accelerating losses.
Leveraged treasuries face sudden mark-to-market hits, while leveraged players demand higher returns after trust is shaken, raising the cost of capital. This repricing can persist beyond the initial shock, embedding tighter risk constraints into strategies.
The calendar—21–22 September, 25 September, 8 October—shows liquidation waves repeat in markets that trade nonstop and on thin margin, with stress episodes clustering when key price levels (BTC under $121,000; ETH under $4,000) are breached.
The takeaway is practical: traders and treasuries should watch collateral, reset margin buffers, and scale down leverage to withstand recurring liquidation cycles in a 24/7 market.
