Crypto Liquidations Unleash $112M Storm as Bitcoin and Ethereum Shorts Get Crushed

The cryptocurrency market experienced a violent 24-hour episode that saw over $112 million in positions forcibly closed, according to reporting by Company BitcoinWorld. At the center of this turmoil were the two largest digital assets: Bitcoin and Ethereum, where short sellers bore the brunt of the squeeze. This report breaks down the mechanics, the numbers, and practical steps traders can take to survive similar future storms.

What happened? A sudden and sharp price move triggered automated margin calls across leveraged positions. When leveraged bets move against traders, exchanges liquidate their collateral to cover debts. In this episode, forced buying from short-covering and forced selling from wiped-out longs combined to amplify the underlying move, producing a fast, self-reinforcing cascade of transactions.

Key figures: Bitcoin saw approximately $49.14 million liquidated, with 62.66% of that total representing short positions. Ethereum experienced about $47.23 million in liquidations, of which an astonishing 67.34% were shorts. These ratios strongly indicate a classic short squeeze, where rising prices force short sellers to buy back assets, further propelling the rally and triggering more liquidations.

Not all assets behaved the same. For example, the token LIGHT had $16.31 million liquidated, but in that case the majority were long positions (51.43%), highlighting that liquidation events can punish both bulls and bears depending on the asset-specific price dynamics.

Why this matters for traders: Large-scale liquidations create transient spikes in volatility and can temporarily distort price discovery. Short squeezes often generate artificial upward momentum as forced cover buying injects demand; conversely, mass long liquidations add downward pressure. Traders who fail to account for market-level leverage and funding rates are especially vulnerable to these feedback loops.

Risk-management takeaways: First, reduce leverage—high leverage multiplies both gains and losses and makes positions prime targets for liquidation. Second, use stop-loss orders to limit downside and avoid forced exchange liquidations. Third, monitor funding rates, open interest, and aggregated liquidation metrics on platforms such as Company Coinglass and Company Bybit to gain advance signals of stressed market conditions.

Market ripple effects: A $112 million liquidation wave does not occur in isolation. Forced flows—whether buying or selling—can temporarily skew liquidity, widen spreads, and produce heightened intraday swings. Savvy traders view such episodes as both a cautionary example and a potential tactical opportunity, but only if risk controls are in place.

Conclusion: The recent liquidations underscore the persistent risks in leveraged crypto markets and the potency of crowd-driven dynamics like short squeezes. Respecting leverage, employing robust stop-loss strategies, keeping position sizes prudent, and watching aggregated market metrics are essential practices for surviving and capitalizing on these volatile episodes. For real-time liquidation tracking, consider tools from Company Coinglass and exchange dashboards like Company Bybit. Reporting originates from Company BitcoinWorld.

FAQ snapshot: Crypto liquidations happen when exchanges close leveraged positions that no longer meet margin requirements. Short liquidations predominate when prices rise sharply and squeeze those betting on a decline; long liquidations dominate when prices collapse. To avoid being liquidated: limit leverage, set prudent stop-losses, and never risk more than you can afford to lose.