Over the past 24 hours, the cryptocurrency market experienced a massive wave of forced liquidations: total liquidations on crypto perpetuals reached $90.7 million. This event highlights the high risks of trading with leverage and shows how quickly large price moves can wipe out traders' margin. The data also reveals significant differences in reactions across assets — ETH and PIPPIN showed distinct liquidation profiles, which is useful to consider when assessing the impact.
What triggered the wave of crypto perpetual liquidations?
Liquidation refers to the automatic closing of a position by the exchange when a trader lacks sufficient margin to maintain it. This usually happens during sharp and unexpected price moves: when the price quickly moves against the leveraged position, margin is depleted, and the exchange closes the position to prevent a negative balance.
Such waves can be triggered by any factor causing sudden volatility — from major news to large trades by big players. This creates a domino effect: forced liquidations add extra pressure on the market and amplify the initial price movement.
Analysis of the $90.7 million liquidations data
The total liquidation amount was $90.7 million, unevenly distributed among assets. For ETH, a significant portion of liquidations (74.67%) were long positions, indicating a sharp price drop and that many leveraged traders were betting on a rise.
For PIPPIN, the ratio was reversed: 87.18% of liquidations were short positions — reflecting a strong price surge that "knocked out" those betting on a decline. BTC was also involved in the overall liquidation picture, though detailed percentage breakdowns for all tokens are not provided.
Domino effect: how large liquidations impact the market
Large liquidations often trigger a chain reaction: closing big long positions can lead to additional selling, further pushing prices down, and vice versa for mass short liquidations. This feedback loop increases volatility and makes market moves more abrupt in a short time.
Beyond direct price impact, liquidation waves can boost spot demand or supply as market participants adjust their positions and reduce risk. Understanding this mechanism is important for assessing short-term fluctuations following major sell-offs or rallies.
How can traders avoid liquidation risks?
Reducing liquidation risk involves a combination of risk management tools and trading discipline. Basic measures include using stop-loss orders, reasonable leverage limits, and regularly monitoring margin levels to replenish margin or reduce position size in time.
It's also helpful to follow news and major market events that may cause volatility spikes, and avoid concentrating exposure on a single coin or market side. These simple steps help lower the chance of forced liquidations and preserve capital for ongoing trading.
Why this matters
For miners with any number of devices — from one to a thousand — market volatility and large liquidations matter because they affect the price of mined coins and mining profitability. Rapid and strong price swings can reduce ruble revenue upon conversion or make plans to sell coins for covering electricity and maintenance costs unprofitable.
Additionally, increased volatility complicates income and revenue planning, especially if you trade and mine simultaneously. Understanding liquidation mechanics and their market impact helps make more informed decisions about accumulating, selling, and hedging mined assets.
What to do?
If you are a miner in Russia, start with simple practical steps: avoid speculative trading with high leverage on your own or borrowed positions without a clear plan, separate mining revenue into operational expenses and reserve funds, and plan sales to avoid dependence on short-term price spikes. These measures help survive volatile periods without critical losses.
Specific recommendations: regularly monitor margin and exchange balances, set protective orders before potentially volatile events, and avoid selling all mined crypto at once. If interested, study materials on previous liquidation waves to understand market behavior types, such as the $112 million analysis and compare with other cases like $344 million liquidations to see common development scenarios.
Key takeaways from the $90.7 million event
The $90.7 million liquidation event reminds us that leveraged trading can quickly wipe out traders' margin and cause strong volatility. Different assets react differently: in one case longs suffer, in another shorts, highlighting market dynamic uncertainty.
The main lesson for all market participants is risk management discipline, use of protective orders, and moderate leverage. These simple principles help minimize the chance of becoming part of the next wave of forced liquidations.