The crypto market has endured its most volatile week in months, culminating in the largest liquidation event since December 2024. As the global market cap stands at $3.78 trillion (up 1% in 24 hours), fear lingers among investors, with the Fear & Greed Index sitting at a wary 34. This latest shakeout saw both major and altcoin prices spiral downward, sending leveraged traders scrambling and forcing exchanges to close over $1.7 billion in positions in a single sweep.
The Week’s Market Meltdown
September 2025’s “Red September” proved brutal for bulls. Ethereum was hit hardest, diving roughly 12% on the week and tumbling below its crucial $4,000 support, a decline unmatched since June.
Bitcoin lost about 5%, retreating to near $109,000, while Dogecoin and Solana each clocked weekly losses of 21%. In total, nearly $300 billion in value was erased from the sector in a matter of days, highlighting the extreme risk and fragility triggered by excessive leverage and thin liquidity.
Highest Liquidations: ETH Takes the Lead
The week’s brutal selloff saw over $1.65 billion in leveraged positions forcibly liquidated, with long bets making up almost 88% of the total clear-out. Ethereum dominated the liquidation charts, responsible for more than $309 million of closed positions, outstripping Bitcoin’s $246 million in liquidations. This was the largest wave of forced closures in the crypto market since December 2024.
“Largest liquidation in the Crypto market since December 9th, 2024… These are leveraged positions closed by force. Most were longs on #ETH.”
Which Sectors Got Hit the Hardest?
Within the broader market, the DeFi category bore the brunt of the pain as massively leveraged futures positions were “deleveraged” in a cascading effect. The average crypto Relative Strength Index (RSI) slid to 44.95, echoing widespread weakness. Liquidation heatmaps reveal large clusters centered around major altcoins and tokens favored by retail traders and funds.
“High leverage + volatility = recipe for liquidation… Financial education means learning about risk management – it’s not optional – and recognising that market drops also teach valuable lessons.”
What Analysts Are Watching Next?
Experts agree this cleansing flush of leverage has the potential to stabilize market positioning, but until risk appetite revives, volatility may persist. With the Altcoin Season Index at 70/100, altcoins remain relatively strong, but the lesson is clear: unbridled leverage can rapidly turn bullish optimism into panic-driven selloffs.
FAQs
The spike is by a sharp drop in major cryptocurrencies like Ethereum and Bitcoin, and by high leverage. This forced exchanges to close out more than $1.7 billion in risky positions, mostly longs.
Ethereum saw the steepest drop, falling about 12% and registered the highest liquidation volume at over $309 million.
The DeFi sector and leveraged futures took the biggest hit, as the majority of liquidations came from overleveraged long bets.
