This week, in the UTC+8 time zone, the BTC and ETH contract markets experienced a rare concentrated deleveraging event, with price declines and insufficient margin triggering a chain reaction of liquidations in the long direction. According to a single statistical source, the total liquidation scale across the network in the past 24 hours was approximately $1.451 billion, with long positions being liquidated far exceeding short positions, exposing the structural imbalance in the contract market. This article will analyze the disclosed data, the structural characteristics of high-leverage positions, and the distribution of liquidation pressure above and below, to outline the driving factors behind this round of deleveraging and assess its potential impact on future market volatility and investor behavior.
Imbalance in Long and Short Liquidations and Data Source Risks
● Comparison of Fund Volume: According to a single source, CoinAnk, the total liquidation scale across the network in the past 24 hours was approximately $1.451 billion, with long liquidations around $1.361 billion and short liquidations about $90 million, indicating an extreme imbalance in the long-short liquidation ratio. This data points to the main theme of this round of market activity not being long-short hedging, but rather the passive deleveraging of high-leverage long positions concentrated in one direction, reflecting the previously crowded long sentiment at high levels.
● Concentration of the Main Battlefield: From the perspective of the underlying structure, liquidations related to BTC were about $683 million, and those related to ETH were about $335 million, with these two major assets collectively dominating the total liquidation amount. This indicates that this round of deleveraging is not a localized event involving long-tail assets, but rather occurs in the most liquid and highly leveraged main track, reflecting the systemic risk transmission effect when leverage in leading assets is excessively accumulated.
● Platform Impact Samples: At the platform level, public cases show that HTX had approximately $80.58 million in BTC-USDT contract liquidations, becoming a representative concentrated liquidation sample in this event. The scale of liquidation on a single platform indicates that when liquidation orders suddenly flood into a local liquidity pool, even leading assets can significantly impact the local order book, amplifying short-term price fluctuations and slippage risks.
● Data Source Caution: It is important to emphasize that the above liquidation data comes entirely from a single statistical source, and different data service providers have variations in calculation methods, covered platforms, and currency aggregation methods, making it difficult to completely eliminate statistical errors and time lags. Therefore, the $1.451 billion figure and its long-short breakdown, as well as asset breakdowns, should be viewed as reference data. Investors should cross-verify with other data sources when assessing market risks to avoid treating a single source as an accurate representation.
High-Leverage Longs Cleared in Chains
● Longs Subject to "One-Sided Liquidation": From the liquidation structure, the current network's long-short liquidations are severely imbalanced, with long liquidations accounting for the vast majority, indicating that the key driver of the price decline is not new short positions suppressing the market, but rather the concentrated breach of a large number of high-leverage long positions accumulated at high levels during price corrections. This one-sided deleveraging pattern often means that funds have already overdrawn their leverage space during the upward phase, and during the downturn, there is insufficient margin buffer, leading to systematic clearing in a short time.
● Large Holders Also Vulnerable: Focusing on large liquidation cases, one of the market's focal points is the rumored case of Huang Licheng's contract account losing about $25.88 million (the amount sourced from public reports), which has been highly amplified on social media. This incident reminds the market that large funds do not inherently equate to stable positions; high leverage and concentrated bets can also amplify the vulnerability of large holders, and when volatility suddenly increases, the size of the funds cannot prevent passive liquidations.
● Sudden Shift in Sentiment: On social media, the mainstream interpretation of this round of adjustments has gradually focused on "high-leverage longs being concentrated liquidated," with many investors reflecting on the previous greed sentiment alongside the current panic. From the optimistic narrative of "mindless longs" to the conspiratorial interpretation of "who is harvesting," sentiment has rapidly switched to extremes, indicating that the leverage risks were severely underestimated in public discourse until the actual liquidations occurred.
● Deleveraging Spiral: From a micro-mechanism perspective, concentrated long liquidations can quickly trigger a large number of market sell orders, further driving down prices, leading to more leveraged positions near the maintenance margin line being passively triggered for liquidation, forming a typical deleveraging spiral of "price decline—insufficient margin—passive selling—further decline." During periods of limited liquidity depth, this chain reaction can easily transform a controllable correction into a high-volatility "flash crash segment."
Liquidation Pressure Zones from Above and Below
● Downward Long Pressure: From the distribution of liquidation pressure, when BTC falls below approximately $80,000, there exists a potential liquidation volume of about $286 million on the long side. These positions are mostly concentrated in the previous chasing-up range, with relatively high leverage. Once the price retraces to touch their concentrated liquidation price range, systematic liquidation orders will be released, amplifying the downward trend and posing a significant threat to short-term long funds.
● Upward Short Risk: Conversely, if BTC breaks above approximately $85,000, the short side faces about $698 million in contract positions at risk of passive liquidation. This portion of funds is mostly based on previous expectations of "high-level corrections" and has established short or hedging positions. Once the price breaks through their risk control range, it will trigger continuous short covering and passive buying, potentially pushing prices further up in a short time, evolving into a short squeeze market.
● Bidirectional Liquidation Layer: With several hundred million dollars in liquidation pressure zones existing on both sides, the current market is effectively in a "short-side minefield above, long-side minefield below" state. In the short term, regardless of whether prices choose to break upward or downward, liquidation orders may be quickly activated, causing originally mild directional choices to be magnified, resulting in significant and high-frequency price fluctuations, posing additional challenges for high-frequency and chasing funds.
● Estimates Rather Than Established Facts: It is important to clarify that the aforementioned $286 million and $698 million liquidation volumes, along with their corresponding key price ranges, primarily derive from liquidation heat maps and derivatives position data extrapolation, essentially representing estimated values of potential pressure, not actual liquidation results that have occurred. These data are more useful for identifying risk concentration in advance, helping traders assess the vulnerabilities of their positions at different price paths, rather than providing certainty about future trends.
FUD Narratives and Polarization of Public Opinion
● Spread of Conspiracy Theories: As the scale of deleveraging has been amplified and disseminated, a large number of conspiracy theories and FUD narratives have quickly emerged in the crypto community surrounding this round of liquidations, with some investors directly attributing the liquidations to "organized harvesting" and "collusion among market makers to crash prices." Such narratives often overlook the inherent fragility of the high-leverage structure itself, simplifying systemic risks to a single entity's manipulation, which tends to amplify victim sentiments among retail investors rather than promote reflection on their own risk management.
● Official Cooling Statements: In response to attacks on large platforms and individuals, CZ publicly stated on social media, "This is not the first time, and it won't be the last," intending to remind the market that high volatility and deleveraging are the norms in the crypto derivatives market, not isolated events. This statement attempts to cool the overheated public discourse, shifting the focus from "who is harvesting" back to "how to survive in a high-volatility environment."
● Boundaries of Public Sentiment and Facts: The claim that "almost everyone is long above $80,000" has become popular on social media, describing the degree of crowding among longs in this round. However, it is important to clarify that this is based on individual opinions and emotional perceptions of unverified public sentiment, rather than systematically statistical data conclusions. Mistaking such claims for facts not only amplifies panic but may also mislead investors' judgments about the actual distribution of positions, and should be strictly distinguished from verifiable data.
● Emotional-Leverage Resonance: Driven by extreme narratives, during periods of greed, funds are more inclined to continue leveraging at so-called "highs that won't fall," while during panic, they tend to concentrate on liquidating positions or reverse betting, accelerating the accumulation of leverage at local tops. Once a significant correction is triggered, this accumulated leverage can be released in a short time through systematic liquidations, completing a "emotional-leverage resonance" loop from extreme sentiment to price shocks, forming the chain liquidation scenes we observed in this round of events.
Macroeconomic Uncertainty and Replaying of Capital Games
● Macroeconomic and Political Variables: The window period for this round of deleveraging coincided with a phase of heightened disturbances in macro and policy expectations, such as the recent meeting between former Federal Reserve Governor Kevin Warsh and Trump, which sparked market associations regarding future monetary policy directions and regulatory attitudes. In an environment where crypto assets are highly sensitive to interest rates and policy expectations, any marginal changes can easily be amplified into trend signals, prompting leveraged funds to collectively position themselves at the wrong time.
● Crowded Leverage More Prone to Tread: In a context where there remains high uncertainty regarding future interest rate paths and regulatory directions, the contract market is more likely to experience "crowded positions driven by the same narrative." When expectations suddenly reverse or are disproven, leveraged accounts in the same direction will rush to liquidate, leading to a stampede-style deleveraging. This round of concentrated long liquidations largely confirms the typical risk of excessive betting on "positive expectations" under unstable macro expectations.
● Cleansing Effect of Deleveraging: Historical experience shows that every round of large-scale deleveraging is accompanied by the collective cleansing of high leverage and short-term speculative funds. In the short term, this is painful, but in the long term, it helps to accumulate a healthier position foundation for subsequent trends. Shortening the leverage chain, raising margin levels, and dispersing overly concentrated floating profits can significantly lower the threshold for passive liquidations in the next phase of the market, allowing it to regain upward "elastic space" after experiencing severe volatility.
● Realistic Choices in Position Management: At this stage, a more rational strategy is not to attempt to predict the precise timing of the next major volatility, but to actively reduce leverage multiples, diversify position building rhythms, and focus on the liquidation price positions of the dense liquidation zones above and below. For most participants, avoiding having positions in the "vulnerable zone where a single shock leads to passive liquidation" is more critical than betting on the direction; otherwise, whether right or wrong, they may ultimately only participate in the market through passive exit.
Aftermath of Deleveraging and Risks of the Next Round of Liquidations
Current data indicates that this round of deleveraging is primarily concentrated in high-leverage longs of BTC and ETH, with the 24-hour liquidation scale reaching $1.451 billion under a single source, where the clearing on the long side far exceeds that on the short side. This structure not only explains why the market experienced a "stampede-style decline" in a short time but also exposes the extent of leverage accumulation above mainstream assets, indicating that previous long optimism has been severely overdrawn.
From the potential liquidation distribution perspective, there still exist several hundred million dollars in untriggered liquidation bands on both sides: the long risk zone below $80,000 and the short risk zone above $85,000, together forming the "liquidation layer" at the current price level. This means that this round of deleveraging has not permanently cleared risks; as long as prices make a significant breakthrough in either direction, concentrated liquidations may be triggered again, causing volatility to be amplified a second or even multiple times.
For investors, it is more important to reflect on their own leverage management in this round of chain liquidations rather than questioning "who is harvesting": examining their contract and borrowing positions' liquidation thresholds at different price levels, assessing whether they will be forcibly liquidated by the system without proactive decision-making once prices enter the upper and lower potential liquidation dense zones. Only by placing positions within a sufficiently safe margin buffer can one discuss trends and long-term logic.
In the coming period, if macro and policy expectations experience severe fluctuations again, combined with the market's crowded bets on a single narrative, a new round of liquidations is likely to replay near the current dense liquidation zones. For all participants, what truly needs to be prioritized is not the direction of the next surge or plunge, but rather building the risk tolerance to withstand the impact of the next round of deleveraging in advance.
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