Cryptocurrency markets are well known for their extreme volatility, and liquidation events have been one of the most evident indicators of sudden price swings. In bullish markets, prices could surge rapidly, which leads to substantial gains for traders. On the other hand, bearish moves can sweep out large portions of portfolios in minutes. Such extreme price swings can wipe out billions of dollars in market value, thereby demonstrating the unpredictable nature of cryptocurrencies.
The article utilizes data from analytical platforms like CoinGlass and additionally draws attention to the five most major liquidation events in the maturing crypto space.
What are crypto liquidations?
Crypto liquidations occur when an exchange closes a trader’s position automatically due to unfavorable market movement against the trader’s position. Liquidations illustrate the rapidity and volatility of the crypto market, where a profitable position can end up in a loss in no time.
1. October 11, 2025: U.S. Tariff Hike on China – $19.16 Billion Liquidated
United States and China relations became worse again as the trade disputes flared up; President Trump announced a 100% tax on all Chinese imports, which includes technology and software, which caused a forceful reaction from the market.
President Donald Trump said the United States would impose a new tariff of 100% on imports from China “over and above any tariff that they are currently paying,” starting on Nov. 1.
In 24 hours, traders liquidated over $19 billion in positions, which is the largest on record. Long positions accounted for nearly $16.7 billion of the losses, with Bitcoin experiencing a 17.26% price swing. Supply chain issues along with their economic implications raised worries that resulted in increased selling pressure, which in turn impacted over 1.63 million traders. Among them were a considerable number of traders in Asia-related assets that had leveraged positions. The incident significantly reduced the total market capitalization and highlighted the fragile position of crypto in global politics.
2. April 18, 2021: AML Crackdown Rumor + Mining Halt – $9.94 Billion Liquidated
The bull market of 2021 experienced the rumors about the U.S. anti-money laundering regulations to surface, which, combined with the news of mining halts due to power cuts in Xinjiang, China, led to the liquidations which came to $9.94 billion in total. Among the liquidated positions, $9.03 billion were long positions; additionally, Bitcoin’s price fluctuation reached 15.33%.
The total number of traders who faced losses was over 1.03 million, and the losses were primarily in mining-related tokens. Bitcoin dropped 15% and experienced a fall from $62,000 to $56,000, while Ethereum’s value fell by 20%. The main driver for the sell-off was the mounting concerns about the declines in hash rates and stricter laws, which eventually extended to the entire altcoin market. The incident took place prior to China’s formal restriction of cryptocurrency mining and was an indicator of the governmental pressure that would subsequently lead miners either to cease operations or to move to other spaces.
3. May 19, 2021: Tesla Stance Reversal + Regulatory Tightening – $9.01 Billion Liquidated
Elon Musk announced Tesla’s decision to discontinue accepting payments in Bitcoin. He cited environmental issues related to Bitcoin mining as the reason. The news came along with the tightening of regulations in China and the U.S. The total liquidations hit $9.01 billion. Among that total, long positions had a share of $7.87 billion. Bitcoin went through a price fluctuation of 25.64%. About 839,000 traders lost their positions due to the liquidation. The combination of stop-loss orders and margin calls led to increased selling pressure. The event demonstrated how famous individuals can influence consumer sentiment.
4. February 22, 2021: Overheated Rally Correction – $4.10 Billion Liquidated
In early 2021, Bitcoin was exploring the areas close to $58,000, and heavy leverage throughout the market started to build up, thereby increasing the downside risk. Following this, a sharp correction led to the liquidation of $4.10 billion, with long positions being the largest part at $3.69 billion. The profit-taking process and bearish technical indicators combined to accelerate selling pressure, resulting in a 14.88% decline in price of the largest cryptocurrency. The move led to forced liquidations of more than 427,000 traders. The pullback was a means to clear the market of overextended leverage and to reset the conditions, which in turn eventually allowed the market to stage another big move.
5. September 7, 2021: El Salvador BTC Law Launch Dump – $3.65 Billion Liquidated
El Salvador’s implementation of Bitcoin as a legal tender encountered problems with the Chivo wallet and public demonstrations while experiencing a major sell-off for the cryptocurrencies. The total amount of liquidations was $3.65 billion, out of which $3.33 billion was lost by the long positions as the price of Bitcoin fell 20.62%. Around 372,000 traders suffered losses; that highlighted the difficulties in acceptance and infrastructure.
