Crypto Markets in Turmoil: $1.5B Liquidations Shake Bitcoin, Ethereum, and Altcoins

Crypto Market Meltdown: $1.5B Liquidations Send Bitcoin and Ethereum Reeling

The global cryptocurrency market witnessed another brutal downturn this week, with over $1.5 billion in leveraged positions wiped out in just 24 hours, deepening a sell-off that has now stretched across multiple sessions. Total crypto market capitalization slipped 3.17% overnight, falling to $3.66 trillion, extending weekly losses to more than 7%.

Analysts say the recent collapse stems from a toxic combination of highly leveraged bets unwinding, global risk aversion, and mounting sector-specific concerns—all converging to create one of the sharpest pullbacks in months.

Heavy Liquidations Trigger Panic Selling

Market data from leading derivatives platforms show that more than $1.5 billion worth of long positions were liquidated between Monday and Tuesday, marking the largest single-day flush since mid-2024. Most of the forced sell-offs were concentrated in Bitcoin and Ethereum, though altcoins also suffered deep double-digit losses.

The liquidation wave has led to increased volatility, amplifying price swings and forcing traders to de-risk across the board. Bitcoin’s price tumbled to around $107,000, while Ethereum slumped to roughly $3,800, each facing sustained downward pressure as liquidity thinned.

“The market is facing a deleveraging storm,” said Arun Menon, a senior analyst at CryptoQuant Research. “The massive liquidation cascade shows how overexposed traders have become, especially in perpetual futures. Once long positions began to unwind, it set off a domino effect that dragged the entire market lower.”

Correlation With Nasdaq Weakens as Investors Retreat

One of the most notable developments in this downturn is the decoupling of crypto from traditional equities. The correlation between Bitcoin and the Nasdaq index dropped to -0.55, signaling a growing divergence as investors pull back from risk assets.

This break in correlation suggests that digital assets are now being treated with a different risk lens, particularly as macroeconomic uncertainty mounts. Global investors are increasingly cautious amid rising Treasury yields, geopolitical tensions, and a strengthening U.S. dollar, all of which tend to drive capital away from speculative markets.

Adding to the bearish sentiment, a prominent trader known as “The Trump Insider” reportedly expanded his bearish Bitcoin position by $22 million, pushing total short exposure on the asset to nearly $99.6 million. That move sparked broader market anxiety, reinforcing the perception that institutional traders are hedging against further downside.

Sector-Specific Pressures Add to Market Stress

Beyond leverage and macro forces, crypto-specific problems are weighing heavily on sentiment. BNB Chain’s memecoin ecosystem experienced dramatic losses, with some tokens plunging between 60% and 95% in value over the past week.

Meanwhile, new restrictions on mining grid connections in British Columbia, Canada, have added to the gloom. Local authorities have limited new crypto-mining permits in an effort to preserve energy capacity, putting additional stress on mining firms already grappling with high operational costs.

Combined, these headwinds have created what analysts describe as a “perfect storm” for digital assets—a mix of internal fragility and external pressure that could define the near-term trajectory for the entire crypto market.

Coinbase Bets Big on Crypto Media Revival

While prices tumble, industry players are still investing heavily in long-term growth. Coinbase, one of the world’s largest cryptocurrency exchanges, has made a surprising media move—spending $25 million to revive the once-iconic UpOnly podcast.

Originally popularized during the 2021 bull market, UpOnly featured interviews with top crypto figures and traders before fading after the FTX collapse. Coinbase’s acquisition signals a renewed push to shape crypto culture through storytelling and digital engagement.

Coinbase CEO Brian Armstrong revealed that the company has also purchased the UpOnly NFT, one of the most expensive NFTs ever sold, now ranking among the top five highest-value digital collectibles in history.

“Our goal is to reintroduce UpOnly with a new season and a broader vision,” Armstrong said. “Crypto is evolving fast, and media is a critical tool to make complex technologies accessible to millions of new participants.”

Industry observers say this move could bolster Coinbase’s brand image as it seeks to expand beyond trading into digital culture and education. The firm’s decision to merge entertainment with education also mirrors a wider trend of Web3 companies building ecosystems that extend beyond financial products.

Evernorth, Backed by Ripple, Targets $1 Billion SPAC Merger

In a separate development, blockchain infrastructure firm Evernorth Holdings, backed by Ripple Labs, announced plans for a $1 billion merger with Armada Acquisition Corp. II, a Nasdaq-listed SPAC.

The deal, which will result in Evernorth going public under the ticker XRPN, is seen as a major step toward bridging traditional finance with crypto-based treasury management.

Japan’s SBI Holdings has invested over $200 million in the venture, with additional support from Pantera Capital, Kraken Ventures, Ripple, and GSR Markets. According to CEO Asheesh Birla, the company intends to build one of the largest XRP treasuries globally, enabling institutions to gain direct exposure to XRP liquidity and on-chain yield strategies.

“The merger isn’t just about going public,” Birla said in an interview. “It’s about creating an infrastructure that integrates blockchain finance into the global capital markets system. This is the next step toward legitimizing crypto treasury management for institutional players.”

Market watchers say the move could inject fresh momentum into the XRP ecosystem, which has gained regulatory clarity in several jurisdictions following Ripple’s recent legal victories.

Jack Dorsey Rekindles the Bitcoin vs. Crypto Debate

Adding to this week’s headlines, Jack Dorsey, founder of Twitter and an outspoken Bitcoin advocate, stirred controversy by declaring that “Bitcoin is not crypto.” The statement, posted on X (formerly Twitter), immediately sparked intense debate across the digital asset community.

Dorsey’s remark challenges the widespread classification of Bitcoin within the broader “crypto” label. Critics pointed to Satoshi Nakamoto’s original forum posts from 2010, where Bitcoin was explicitly described as a cryptocurrency. However, Dorsey argues that Bitcoin’s foundational principles differ from the speculative tokens that now dominate the market.

“Bitcoin is monetary technology,” he explained in a follow-up. “It’s not a company, not a product, not a token sale. It’s a protocol for freedom, built to last for centuries—not for trading hype.”

Analysts interpret Dorsey’s stance as a reaffirmation of the ideological divide between Bitcoin maximalists—who view BTC as the only true decentralized asset—and the broader crypto industry, which embraces a wide range of tokens and blockchain projects.

Outlook: Will the Market Stabilize or Slide Further?

Despite the intense volatility, some traders believe the current correction could serve as a healthy reset for overheated markets. Funding rates across exchanges have normalized, and long-term holders continue to accumulate at lower prices.

“Corrections like these are painful but necessary,” said Menon. “They flush out excess leverage and restore market balance. The key is whether macro conditions improve and liquidity returns to risk assets.”

Still, uncertainty looms large. With global markets jittery over inflation, interest rate policy, and geopolitical conflict, cryptocurrencies may remain volatile in the weeks ahead. Many investors are now turning to stablecoins and on-chain yield protocols as safer short-term plays until clearer momentum emerges.

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