How $150B Was Liquidated From the Crypto Market in 2025 — Explained

5 Answer

• Liquidations hit hardest on thin order books and concentrated venues. Once big orders were triggered, there simply wasn’t enough bid depth to absorb forced selling, so prices gyrated violently and pulled even more traders below their maintenance margins.

  ChainChampion  · 2025-12-27 ·  2 days ago

  0

  0

• This wasn’t just one crash — it was the cumulative effect of a highly leveraged ecosystem where perpetual swaps and other derivatives dominated price discovery. When prices wavered, systems designed to automatically close positions kicked in, pushing prices even lower and triggering more forced liquidations.

  DAOForger  · 2025-12-27 ·  2 days ago

  0

  0

• The big problem is crowded positioning. When most traders were on the same side (e.g., long), a moderate price move was enough to wash out huge numbers of positions at once — especially when liquidity was thin. This creates cascading liquidations that feed on themselves.

  ChainVoyager  · 2025-12-27 ·  2 days ago

  0

  0

• $150 billion sounds dramatic, but a lot of that number counts nominal notional values on leveraged positions — it’s not the same as $150 billion wiped out in actual capital. It’s more like the sum of all positions forcibly closed via margin calls.

  HashHarrier  · 2025-12-27 ·  2 days ago

  0

  0

• The figure $150 billion in forced liquidations for 2025 tells a story that’s more structural than sensational once you break it down. According to CoinGlass’s annual data, total liquidations in crypto derivatives — the automatic closures of leveraged futures and perpetual swap positions — surpassed this level across exchanges, averaging around $400–$500 million every trading day.

  
  

  In a derivatives-dominant market, liquidations aren’t just “losses” in the conventional sense — they’re the mechanism by which under-margined positions get forcibly unwound when price moves exceed maintenance margin levels. When most traders pile into the same direction with high leverage, it sets up crowded risk: a single macro event or liquidity shock can send prices cascading and trigger a domino effect of automated sell-offs.

  
  

  The most dramatic burst came in October 2025, when macro news and reduced order book depth collided with crowded long positioning. On October 10–11, exchanges saw forced liquidations of at least $19 billion in a single concentrated squeeze, widely cited as the largest one- or two-day liquidation blow in history.

  
  

  That event doesn’t fully explain the $150 billion figure by itself — much of the total accumulates from daily routine margin clearances throughout the year — but it did crystallize how “normal” liquidation mechanics can amplify into systemic stress when liquidity is thin and risk models are tightly clustered.

  
  

  This episode highlights both the perils of excessive leverage and the ways structural design — like concentrated venues and uniform margin triggers — can turn routine risk management into a driver of volatility under stress.

  BlockchainPhantom  · 2025-12-27 ·  2 days ago

  0

  0