Cryptocurrency markets faced a sharp downturn on Monday after more than $1.5 billion in bullish wagers were liquidated, marking the biggest wave of forced sell-offs since March, according to data cited by Bloomberg.
The liquidation of nearly half a billion dollars in leveraged long positions on Ether sent the world’s second-largest cryptocurrency plunging as much as 9% to $4,075. Bitcoin, meanwhile, slipped 3% to $111,998 at one point. Other major tokens, including Solana, Algorand, and Avalanche, also saw steep declines.
In total, more than 407,000 traders saw positions liquidated within a 24-hour period, according to Coinglass. The selloff dragged the overall digital-asset market cap below $4 trillion, CoinGecko data showed.
The downturn highlights fading momentum after record highs in August, when demand from publicly-listed companies accumulating tokens pushed Bitcoin and Ether upward. Shares of digital-asset treasury firms — from Michael Saylor’s Strategy to Japan’s Metaplanet Inc. — have since retreated, reducing optimism for further inflows.
“It feels like the market needs a breather, with some participants concerned that the ‘DAT-trade’ is losing steam and there are no more meaningful inflows on the horizon,” said George Mandres, senior trader at XBTO Trading, referring to digital-asset treasuries.
Data from CryptoQuant indicated that the funding rate for Ether perpetual futures has turned negative, reaching its lowest point since last year’s unwind of the yen carry trade. This suggests short sellers are increasingly dominating the market.
Bitcoin has largely been range-bound between $110,100 and $120,000 since July, while Ether and Solana surged earlier this summer, gaining 74% and 52% respectively since July 1. By contrast, traditional safe-haven assets are thriving: gold hit an all-time high of nearly $3,720 an ounce on Monday, while silver also advanced.
“The disappointment stands out compared to tradfi, where equities have held up relatively better while crypto underperforms, reinforcing the sense that this move is more idiosyncratic to the asset class,” Sean McNulty, Asia-Pacific derivatives trading lead at FalconX, told Bloomberg.
As of 11:20 a.m. in London, Bitcoin was trading near $112,700, while Ether hovered around $4,170.
