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The cryptocurrency market has entered one of its most volatile phases of the year as more than $1 billion worth of positions across Bitcoin, Ethereum, Solana, XRP and other leading altcoins were liquidated within 24 hours. The sell-off has erased a staggering $1.35 trillion in total crypto market value since October, reflecting panic-driven trading conditions ahead of a massive options expiry event.
Bitcoin remains at the center of the downturn after falling to $85,000, slipping sharply from levels above $97,000 earlier in the month. Ethereum followed with a drop of 9%, falling below the $2,800 mark, while other altcoins posted significant losses as billions of dollars in leverage unwound across the derivatives market.
The size and speed of the decline have left traders searching for stability in a market that currently shows no firm support — and the timing makes the situation even more precarious, with a multi-billion-dollar options expiry set to hit the market within hours.
Liquidations hit traders across the board
According to data from Coinglass, more than 252,000 traders saw their positions forcibly closed as violent price swings engulfed the market. The largest single liquidation recorded was a $30.91 million BTCUSDT position on HTX, adding to panic-selling during the downturn.
Across the market, $850 million in long positions were liquidated within a day, compared to roughly $150 million in shorts. The imbalance shows that traders caught off-side were overwhelmingly on the bullish side of the market — a signal that excessive leverage had accumulated during the previous rally.
Making matters worse, $450 million worth of liquidations occurred within just two hours, shortly after a strong U.S. jobs report reduced market expectations of a Federal Reserve rate cut in December. As interest-rate expectations shifted, risk assets — including crypto — felt immediate pressure.
Bitcoin and Ethereum take the largest hit
Bitcoin’s plunge to $85,300 marks its lowest level since early Q3 and confirms that sellers currently hold momentum. Roughly $500 million in Bitcoin liquidations were recorded in a single day, most of them from long positions that were forced to close as BTC dropped below key resistance levels.
Ethereum followed the same pattern, falling 9% over the same period. While BTC remains the dominant target for liquidations, Ethereum has been deeply affected because of its interconnected derivatives market. Traders say that a sharp drop below $3,000 triggered a chain reaction of forced closures as leveraged positions were flushed out with little room to recover.
Other top assets — including SOL, XRP, ZEC, HYPE, DOGE, TON, ASTER and BNB — were among the most liquidated cryptocurrencies, indicating that the sell-off spanned the full market rather than a single sector.
Options expiry could fuel additional volatility
The pressure is far from over. The markets are bracing for a $4.2 billion crypto options expiry, which could determine whether the downturn deepens or stabilizes.
On Deribit, more than 39,000 BTC options worth $3.4 billion in notional value are set to expire. The put-call ratio stands at 0.52, with a max pain price of $98,000 — well above Bitcoin’s current price. While this might normally favor put holders, traders have continued adding bearish positions, pushing the 24-hour put-call volume ratio to 1.36. That shift shows that sentiment remains defensive and that traders expect further downside or volatility.
Ethereum faces similar conditions. More than 185,000 ETH options worth nearly $525 million are scheduled to expire, with a put-call ratio of 0.72. The max pain point for ETH is $3,200, far above current prices. Put volume has doubled in the last 24 hours, and traders appear to be preparing for further instability.
Deribit notes that overall positioning does not yet show extreme panic, but protective activity within the options market confirms that many traders are hedging rather than positioning for recovery.
A wider macro trend is unfolding
While many investors remain focused on short-term price movement, research firm 10x Research warns that the “real story” may lie elsewhere. The firm highlights that Bitcoin’s downturn is not just a technical correction — it is also tied to broader factors, including:
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ETF positioning shifts
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Failure of recent crypto IPOs
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A change in Wall Street incentives toward risk management rather than growth allocation
According to 10x Research, it is still too early to call this a buying opportunity, as forced selling pressures from ETF holders and leveraged traders have not yet fully resolved. The firm expects that more position unwinding may be necessary before the market can establish a durable bottom.
What traders are watching now
For the moment, the market’s trajectory will depend on how traders react to the upcoming options expiry. If expiry-related selling intensifies, Bitcoin and Ethereum may struggle to recover quickly. However, if demand stabilizes and liquidation pressure eases, the market may attempt to form a temporary floor.
Investors will also monitor ETF flows to gauge whether institutional buyers re-enter the market or continue to reduce risk exposure.
Outlook
Even though the sell-off has created panic among traders, crypto markets have historically recovered from deep liquidations once volatility stabilizes and leverage resets. However, the current backdrop shows that risk appetite remains low and caution dominates both spot and derivatives markets.
The coming days will reveal whether the worst of the liquidation cycle has passed — or whether macro conditions and options expiration will push crypto into deeper correction territory.
