Crypto Market Sees $1.5B Liquidation; Bitcoin, Ethereum Show Resilience
On September 22, the cryptocurrency market witnessed a sudden liquidation of approximately $1.5 billion in leveraged long positions in top cryptocurrencies like Bitcoin and Ethereum. This event, triggered by a mix of high leveraged long positions, profit-taking after a Fed rate cut, and low liquidity, sent shockwaves through the stock market today.
The liquidation, though substantial, accounted for a mere 0.04% of the combined market cap of all cryptocurrencies. Despite the initial shock, both Bitcoin and Ethereum have shown resilience in the past, recovering swiftly from sharp sell-offs. Following the last major liquidation event in March 2025, Bitcoin and Ethereum staged impressive comebacks, gaining 30% and 110% respectively.
The long-term outlook for these cryptocurrencies remains positive. Bitcoin's scarcity continues to be a key factor, while Ethereum's exposure to the growing decentralised applications (dApps) market continues to drive its prospects.
The recent liquidation event, while significant, represented a small fraction of the overall cryptocurrency market. Both Bitcoin and Ethereum have proven their ability to bounce back from such events in the past. Looking ahead, the long-term prospects for these cryptocurrencies remain unchanged, with Bitcoin's scarcity and Ethereum's dApps exposure continuing to be key factors.
