Imagine waking up to find your favorite cryptocurrencies tumbling like dominoes, wiping out billions in bets overnight—could this be the storm that reshapes the crypto landscape forever? That's the shocking reality hitting traders as Bitcoin and other major coins plummet, sparking a frenzy of forced liquidations worth billions. But stick around, because this isn't just another dip; it's a pivotal moment that could define the next phase of digital assets. And here's where it gets controversial—some say these wipeouts are a necessary purge, while others argue they're manipulated chaos. Let's dive in and unpack what's really happening, step by step, so even newcomers can follow along without getting overwhelmed.
First off, let's break down the basics: We're talking about a massive sell-off where Bitcoin dipped just above $100,000 late Monday, only to rebound slightly to around $101,000. This wasn't random—it was fueled by a tsunami of involuntary liquidations and fresh worries about the broader economy, erasing speculative positions across the crypto world. In the last 24 hours alone, over $2 billion in futures contracts got liquidated, according to CoinGlass. Shocking detail? Long-position traders (those betting on prices going up) took the brunt, losing nearly $1.6 billion—about 80% of the total.
Now, for beginners, liquidations might sound scary, but think of it like this: Imagine borrowing money from a bank to buy stocks. If the stock price crashes and your loan's collateral drops too low, the bank automatically sells your shares to recover their money. That's essentially what happens in crypto futures. Traders use borrowed funds (leverage) to amplify bets, but if prices swing hard against them, exchanges force-close positions by selling into the market. It's a ruthless, automated process designed to protect platforms from losses, but it can snowball into deeper declines.
Large groups of these long liquidations often point to extreme panic, what traders call 'capitulation,' and can hint at short-term market bottoms. On the flip side, if short positions (bets on falling prices) get wiped out, it might signal upcoming peaks. Traders savvy enough to monitor these clustered liquidation zones can spot potential support or resistance levels—areas where forced selling might create a pause or bounce. This is the part most people miss: Liquidations aren't just noise; they're a map to where the market might pivot next. For instance, if you see a concentration of longs at a certain price, it could act as hidden support, like a safety net catching the fall.
This recent event stands out as one of the biggest deleveraging waves since September, showing how shaky trader positions have gotten amid weeks of wild, back-and-forth price swings. Bitcoin shed 5.5% in the past day and over 10% this week. Ethereum (Ether) nosedived 10% to about $3,275, while Solana (SOL) and Binance Coin (BNB) dropped 8% and 7%, respectively. Even XRP, Dogecoin, and Cardano slid 5-6%. The overall crypto market cap retreated to nearly $3.5 trillion, its lowest in more than a month.
Gerry O’Shea, head of global market insights at Hashdex, summed it up in an email to CoinDesk: 'Bitcoin hovered around $100,000 today as cautious vibes gripped global markets, affecting everything from digital currencies to stocks and even commodities.' He pointed to factors like speculation that the Federal Reserve might skip another interest rate cut this year, worries over trade tariffs, shaky credit markets, and overvalued equities. Plus, O’Shea noted that long-term Bitcoin holders are selling, which is natural as the asset grows up—like a teenager cashing in allowance for bigger plans.
Delving into the exchanges, Bybit saw $628 million in liquidations, Hyperliquid hit $533 million, and Binance clocked $421 million. The biggest single hit was an $11 million BTC-USDT long position on HTX. Yet, despite the turbulence, experts like O’Shea remain upbeat: 'Though $100,000 is a key psychological barrier, we don't see this as undermining Bitcoin's long-term appeal.' With the Fed on hold and global risk tolerance still wobbly, the coming days will reveal if this bounce evolves into a real comeback—or if more forced sell-offs are lurking.
But here's where it gets controversial: Are these liquidations a healthy reset, clearing out reckless speculators and strengthening the market? Or are they engineered by big players to manipulate prices, squeezing out smaller traders? Think about it—ETF flows drying up and treasury demands faltering could extend the pain, as warned by analysts like Markus Thielen from 10x Research, who predicts Ether might drop to $2,700-$2,800. Is this just market correction, or a sign of deeper flaws in crypto's structure? We'd love to hear your take—do you see liquidations as inevitable growing pains, or unfair traps? Drop your thoughts in the comments!
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Ether's Dramatic 20% Plunge Sparks Billion-Dollar Liquidation Storm Amid Rising Crypto Setbacks
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The downturn might not be done, with Ether potentially sliding to $2,700-$2,800, according to Markus Thielen of 10x Research.
Highlights:
Ether has crashed over 20% in just two days, rivaling the intensity of the October 10 market crash.
This sharp decline unleashed nearly $1 billion in liquidations over two days, devastating traders with leveraged ETH derivatives.
Analyst Markus Thielen from 10x Research warns of further risks, as slumping ETF inflows, retail interest, and digital asset treasury needs could push ETH even lower to $2,700–$2,800.
Read the complete article: (https://www.coindesk.com/markets/2025/11/04/ether-s-20-freefall-triggers-usd1b-liquidation-cascade-as-crypto-losses-accelerate)
What do you think—will these drops lead to a crypto renaissance, or are we heading for another bust? Is the controversy over liquidations justified, or overblown? Share your opinions below and let's discuss!
