1. The Cryptocurrency Market Faces Large-Scale Liquidation, Highlighting Leverage Risks

On September 25-26, 2025, the cryptocurrency market experienced a severe correction, with a total liquidation amount exceeding $1.15 billion within 24 hours, setting a recent single-day record. Ethereum (ETH) was hit the hardest, with a liquidation amount of $364 million, and its price fell below the psychological threshold of $4,000, with a daily decline of over 6%. Bitcoin (BTC) saw a liquidation amount of $460 million, with prices dipping to around $109,000. Other major tokens, such as Solana (SOL), generally experienced declines exceeding 7%, with SOL's liquidation amount reaching $80.7 million. Since September, the total market capitalization of cryptocurrencies has evaporated by over $160 billion, and the Fear and Greed Index has dropped to 44, reflecting a sharp turn towards panic in market sentiment.

2. Macroeconomic Environment Pressures Risk Assets Generally

The direct trigger for this market volatility stems from a global contraction in risk appetite. On September 25, the three major U.S. stock indices collectively closed lower, with the market adopting a cautious stance ahead of the Federal Reserve's upcoming interest rate decision. Although there were mild signals released from the policy level, investors generally worried that the actual rate cuts might not meet expectations, leading to tighter liquidity expectations, which in turn impacted high-risk assets, including cryptocurrencies.

During this process, Bitcoin did not exhibit the safe-haven properties of "digital gold"; instead, a large number of long leveraged positions were liquidated, amounting to $460 million. Ethereum quickly fell from a high of $4,200 to below $3,900, with liquidations primarily among long positions, indicating that excessive leverage from earlier periods was rapidly cleared during the price correction. Solana was also affected by high-leverage trading in its ecosystem's meme coins and NFT projects, with liquidation scales exceeding $80 million.

Asset/Indicator

Liquidation Amount (USD)

Price Change

Main Direction

Total Network

$1.15 billion

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Long positions account for 91%

Ethereum (ETH)

$43.8 million

Fell below $4,000, decline of 6.31%

Primarily long liquidations

Bitcoin (BTC)

$460 million

Dipped to around $109,000

Primarily long positions

Solana (SOL)

$80.675 million

Dropped to $196, decline over 7%

High leverage compounded

Fear and Greed Index

44 (Fear Zone)

—

—

Total Market Capitalization Loss in September

Over $160 billion

BTC and ETH both significantly corrected

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Data Source: CoinGlass, CoinDesk, Yahoo Finance

3. Structural Issues in the Market Exposed, High Leverage Amplifies Volatility

This liquidation event once again highlights the structural issues present in the cryptocurrency market, particularly the systemic risks brought about by high-leverage operations. According to data platform statistics, long positions accounted for as much as 91% of all liquidated positions, reflecting that the market had accumulated a significant amount of leverage during the upward cycle. Some trading platforms reported individual liquidation amounts exceeding $45 million, indicating that not only retail investors but also some institutions and large holders faced risks.

Regional data shows that Asian investors were significantly affected during this volatility, with higher average leverage levels further amplifying individual losses. Meanwhile, uncertainties at the regulatory level, such as the U.S. Securities and Exchange Commission's investigations into related products, have also intensified market wait-and-see sentiment, suppressing the influx of new capital.

4. Technical Analysis: Support Level Testing and Potential Rebound Signals

● Ethereum (ETH)

Ethereum (ETH) has fallen below the key support level of $4,000, forming a clear bearish channel, with downward momentum remaining strong. The support strength below the current price is weak, and it is expected to target the $3,775-$3,890 range, which coincides with the volume-weighted average price (VWAP) for the development quarter and the annual value area high (VAH). Further declines may reach the $3,600-$3,400 liquidation heatmap concentration area. The MACD (12,26) indicator is deeply entrenched in negative territory, confirming a sell signal, with bullish momentum weak in the short term. However, the RSI (14) has entered the oversold zone (below 30), showing initial signs of bullish divergence, and the short-term daily K has broken below the lower Bollinger Band, suggesting potential short-term rebound opportunities.

● Bitcoin (BTC)

For Bitcoin (BTC), the $109,000 level is facing significant pressure, with the current price testing the trend support bottom of $110,800. The key is to hold the psychological support line of $100,000 to avoid further testing the monthly low of $98,000; if it breaks through the resistance area of $110,500, the rebound space will extend to $113,900.

● Solana (SOL)

Solana (SOL) is currently bottoming around $196, with an RSI (14) of 35.803, also in a sell but oversold state, and a MACD (12,26) value of -3.26.

5. Market Outlook: Short-Term Pressure with Long-Term Return to Fundamentals

Although the current market sentiment is in panic, some indicators suggest that extreme pessimism often signals the formation of a phase bottom. Some analysts point out that institutional investors have been continuously accumulating assets like Ethereum during price corrections, which may indicate that long-term funds are still seeking allocation opportunities.

If there are signs of easing at the macro level, such as the Federal Reserve releasing clear expectations for easing or global stock markets stabilizing, the cryptocurrency market may welcome a technical rebound. However, investors need to recognize that high volatility remains a major characteristic of the current market, and excessive reliance on leveraged trading will continue to pose significant risks.

In the medium to long term, as the regulatory framework gradually clarifies and institutional participation increases, the market is expected to shift from speculation-driven to value-supported, but the process will still be accompanied by significant volatility. It is recommended that investors remain cautious, focus on fundamental research, and manage position risks appropriately.

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