According to Coinglass data, on January 8, 2025, the crypto market was shocked by a massive liquidation worth $604.09 million in the last 24 hours.

Over 191,921 traders suffered losses as their trading positions were automatically closed. The largest liquidation occurred on the ETH/USDT pair on Binance with a whopping $17.74 million.

Crypto Market Liquidation Today

Based on the liquidation graph in the crypto market, it can be seen that on January 7 there was a fairly large spike in liquidations compared to previous days.

These liquidations included both “long” (green) and “short” (red) positions, indicating that many traders suffered losses as the asset price moved sharply in the opposite direction from their predictions.

This indicates high market volatility, where asset prices experience significant changes in a short period of time.

What Caused This Major Liquidation?

This surge in liquidations occurred due to high price volatility. Many traders opened “long” positions in the hope that the price would rise, but in reality the opposite was true. When the price moved sharply down, their positions were forced to close because they no longer met the required margin.

Let's look at the following data:

On January 7, 2025 at 7:00 p.m., data showed total liquidations of $403.832 million for “long” positions and $40.85 million for “short” positions.

This data shows that many traders who opened “long” positions with the expectation of rising prices experienced liquidation due to market movements that did not match their predictions.

This phenomenon reflects the high use of leverage in crypto trading, which can significantly increase the risk of liquidation, especially on high-volume platforms such as Binance and Bitfinex.

This is a reminder that the volatility of the crypto market requires extra caution, especially when using large leverage.

Is This The Biggest Liquidation Of All Time?

While the $604.09 million figure is a huge amount, this liquidation is not the largest of all time in the crypto market.

In previous periods of high volatility, such as in 2021 when Bitcoin prices experienced a sharp correction, liquidations reached more than $1 billion in a day.

However, this liquidation remains significant and is one of the largest in recent months.

Is This Good or Bad For Traders?

A liquidation of this magnitude can be seen as a bad thing, especially for traders who have suffered large losses.

This reflects the unpreparedness or lack of risk management on the part of some traders.

However, for the market as a whole, large liquidations can have long-term positive impacts.

Why?

Liquidation helps reduce excessive leverage positions, so that the market can become more stable after being “cleaned” of excessive speculation.

This is also an important reminder for traders to be more careful, manage risks well, and understand market dynamics before using leverage.#CryptoMarketDip