Crypto Market Correction Triggers $635M in Liquidations

The cryptocurrency market’s Wednesday morning pullback triggered $635 million in liquidations over the past 24 hours, with leveraged long positions bearing the brunt of the downturn. According to CoinGlass data, $489 million of the total liquidations came from long positions, underscoring the volatile underpinnings of the recent rally. Bitcoin extended its retreat from record highs, falling 1.2% over 24 hours and nearly 3% from its $126,080 record high set on Monday, per CoinGecko data.

Ethereum’s losses significantly outpaced Bitcoin’s decline, with ETH trading down 4.6% on the day to $4,492. The market correction revealed particular vulnerability in Ethereum long positions, which suffered $142 million in liquidations—surpassing Bitcoin’s $114 million in long liquidations. This differential performance between the two leading cryptocurrencies highlights the varying risk profiles and market dynamics affecting digital assets during correction periods.

Ryan Lee, chief analyst at universal exchange Bitget, told Decrypt that the sell-off stems from a confluence of factors, including profit-taking after a 10% rally over the last two weeks. “Gold’s rebound this week has likely added to Bitcoin’s short-term pressure,” Lee explained, noting that some macro-focused capital is rotating into the precious metal. He identified “muddy macro signals” and a stronger dollar as creating a risk-off environment that contributed to the crypto market downturn.

The U.S. dollar index (DXY), which measures the greenback’s strength against a basket of currencies, reached an intraday peak of 98.989 on Wednesday—a significant increase from its September 17 low of 96.218, according to TradingView data. This dollar strength typically creates headwinds for risk assets like cryptocurrencies, as investors seek safer havens during periods of macroeconomic uncertainty. The combination of profit-taking, gold’s resurgence, and dollar strength created a perfect storm for the crypto correction.

Despite the short-term pressure, analysts view the drop as a healthy correction rather than a trend reversal. Lee anticipates another 3% to 4% drop before prices stabilize and attempt a breakout above $126,000. He suggested that sustained bullish momentum beyond the current record high could push Bitcoin to the $132,000 to $135,000 range, contingent on improving market sentiment and sustained ETF inflows.

Data from prediction market Myriad, launched by Decrypt’s parent company DASTAN, shows user sentiment has remained steadily optimistic despite the correction. Predictors are placing a 57% chance on Bitcoin pumping to $140,000 rather than dropping to $110,000, indicating underlying confidence in the market’s long-term trajectory. This optimism reflects the persistent “debasement trade” fueled by rising fiscal deficits and a search for assets immune to government mismanagement.

Austin King, Co-Founder of unified decentralized finance trading terminal Nomina, echoed this structural optimism, telling Decrypt that he expects Q4 to be an “exciting quarter for the crypto industry” as investors increasingly turn to Bitcoin as a hedge against global political instability. The long-term drivers for Bitcoin remain intact, supporting the bullish narrative for crypto’s flagship asset despite short-term volatility and correction pressures.