Over-leveraged cryptocurrency traders were liquidated for nearly $2 billion in one of the largest market washouts of the year on Monday, with some analysts attributing this to technical factors rather than a weakening of market fundamentals.

CoinGlass data shows that over 370,000 traders were liquidated in the past 24 hours, amounting to $1.8 billion.

Most of these positions were betting on Ethereum and Bitcoin, while altcoins were also hit hard across the board.

During the liquidation, the cryptocurrency market cap plummeted by over $150 billion, dropping to a two-week low of $3.95 trillion, with Bitcoin (BTC) falling below $112,000 on Coinbase and Ethereum (ETH) dropping below $4,150, marking the largest pullback since mid-August.

Now that the dust has settled, major assets have found temporary support, but if past September adjustments are any indication, there may be more pain ahead.

Raoul Pal, founder of Real Vision, noted that the same thing has been happening, adding that "the cryptocurrency market focuses on big breakthroughs, leverages long positions in advance, and when the first attempt fails, everyone gets liquidated… only then will the real breakthrough happen, marginalizing everyone."

CoinGlass reported that this is the largest long liquidation event of the year. Similar liquidation events occurred in late February, early April, and early August, when the spot market lost hundreds of billions of dollars in a very short time.

Researcher "Bull Theory" attributed the major washout to the "over-imbalance" of altcoin leverage compared to Bitcoin. Ethereum's liquidations exceeded $500 million, more than double that of Bitcoin's long position liquidations.

Nassar Achkar, Chief Strategy Officer at CoinW exchange, stated that this washout "may represent a recent adjustment rather than a shift in a long-term structural bull market, as the future path of easing policies still favors risk assets like Bitcoin."

Meanwhile, IG market analyst Tony Sycamore told Cointelegraph that Bitcoin has recently shown no correlation with tech stocks or gold, but this may be "mainly due to technical factors, as it needs more time to correct the astonishing gains from the past 12 months to the August peak of $125,000 and continue to digest overbought readings."

Bitcoin has only adjusted about 13% since its peak in mid-August. Despite the sharp drop this week, the current decline from its historical high is 9.5%, which is relatively mild compared to pullbacks in previous bull market years.

BTC has fallen in 8 of the past 13 Septembers, but is still up about 4% so far this month. Historically, it performs much better in "up October."

Related: Cryptocurrency funds saw inflows of $1.9 billion last week, with Bitcoin (BTC) ETFs continuing their upward momentum.

Original article: “Cryptocurrency Liquidations Reach $1.8 Billion in a Single Day: Final Washout or More Downside to Come?”

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