The crypto market just experienced one of its bloodiest days. Nearly $800 billion in market capitalization vanished in 24 hours, triggering the liquidation of $19.2 billion in leveraged positions. Bitcoin, Ethereum, and major altcoins all plummeted simultaneously, shocking traders with the scale of the correction.
Bitcoin plunged to $109,751, recording a 17% drop that erased several weeks of gains. Ethereum wasn’t spared, sliding to $3,654 with a correction of over 14%. The total cryptocurrency market capitalization fell to $3.69 trillion, marking the largest daily decline in months.
Altcoins suffered even more severe losses in this widespread bloodbath. XRP collapsed by 25% to reach $2.34, while Dogecoin lost 28% of its value, falling to $0.18. Solana retreated to $172, Cardano shed more than 25% of its valuation, and BNB slid toward $1,122.
This massive correction perfectly illustrates the fragility of a market where leverage had become excessive. Overexposed long positions created a structural imbalance that was simply waiting for a catalyst to explode.
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Analyst Ash Crypto describes this collapse as a classic chain reaction in an over-leveraged market. Traders had massively utilized leverage on centralized exchanges, borrowing funds to amplify their positions. Many operated with “cross-margin” accounts, where a single pool of collateral supported multiple simultaneous transactions.
The trigger came from the announcement of new US tariffs, which sent shock waves through traditional and crypto markets. Bitcoin and Ethereum broke their key support levels, triggering cascading stop-loss orders. The shallow order books of altcoins amplified the phenomenon, transforming moderate sales into steep drops.
Automatic liquidations followed in succession as collateral fell below critical thresholds. Exchanges sold the collateral assets en masse, often consisting of altcoins, further accelerating the downward spiral. More than $20 billion in positions were wiped out within hours in a devastating domino effect.
Ash Crypto emphasizes that these liquidation cascades regularly occur when leverage becomes unsustainable. Paradoxically, these violent purges cleanse the market by eliminating excessive speculative positions and establishing healthier foundations for what’s to come.
Crypto history shows that major crashes often precede powerful rallies. The COVID crash of March 2020 was followed by a historic bull run. The FTX collapse in November 2022 eventually paved the way for the 2023-2024 recovery. These brutal corrections eliminate weak positions and allow solid buyers to accumulate at attractive levels.
If this pattern repeats, the current correction could be setting the stage for a significant rebound in the coming months. The fundamental drivers of the crypto market remain intact, and institutional adoption continues to progress despite short-term volatility.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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