Bitcoin Plunges to $111K, Triggers $500M Long Liquidations
On August 24, 2025, Bitcoin plunged from approximately $117,000 to $111,000 during a thinly traded weekend session, triggering over $500 million in long liquidations across major derivatives platforms. A rapid unwind of leveraged Bitcoin longs, amplified by elevated futures funding rates and macroeconomic risk-off sentiment, cascaded through stop-loss orders and widened the sell-off. Ethereum and leading altcoins mirrored the move, with ETH falling around 7% amid funding rate stress and spot ETF outflows. Analysis indicates that high open interest and speculative excess in CME futures and perpetual swaps set the stage for a liquidity shock. This event highlights the liquidity and leverage risks facing Bitcoin traders. Short-term risk management steps include reducing leverage and widening stop placements, while institutions are advised to revisit margin models and liquidity stress tests to mitigate concentrated counterparty risk.
Bearish
Bitcoin’s sudden fall from $117K to $111K, driven by leveraged long liquidations and thin weekend liquidity, amplifies market volatility and erodes short-term confidence. Over $500 million in margin calls triggered a cascade of automated sells, mirroring past weekend liquidity squeezes that led to further drops. This heightened selling pressure and funding rate stress on derivatives markets signal a bearish outlook. In the short term, traders may reduce leverage and liquidity providers could widen spreads, dampening volume. Over the longer term, while reduced leverage could stabilize markets, the event underscores vulnerabilities that may weigh on bullish sentiment until liquidity and funding rates normalize.