Bitcoin Longs Smashed: $47.32M in BTC Liquidations as ETH Also Hit; ZEC Faces Short Squeeze
Over a 24-hour period on March 25, 2025, perpetual futures markets saw a large deleveraging event: $47.32 million in Bitcoin (BTC) futures were liquidated, with 91.39% coming from long positions, indicating a concentrated long squeeze. Ethereum (ETH) experienced $21.18 million in liquidations, 74.9% of which were longs. By contrast, Zcash (ZEC) recorded $5.52 million in liquidations dominated by shorts (94.88%), consistent with a short squeeze in a low-liquidity altcoin. The report links these moves to leverage mechanics in perpetual contracts—high leverage and crowded long positions amplified a downward move for BTC/ETH, while low liquidity and idiosyncratic flows produced the ZEC rally and short liquidations. Traders are advised to monitor funding rates, open interest, volumes and liquidity; adopt lower leverage, use stop-losses, and diversify positions. The episode highlights persistent structural risks in crypto derivatives despite market maturation and may prompt temporary reductions in available leverage as exchanges adjust risk parameters.
Bearish
The event signals near-term bearish pressure for BTC and ETH because massive long liquidations (91.39% of $47.32M for BTC; 74.9% of $21.18M for ETH) imply a forced cascade of selling that depresses prices and can trigger further liquidations. Historically, concentrated long squeezes (e.g., May 2021 deleveraging) produce sharp short-term downside and elevated volatility; exchanges often tighten leverage and funding conditions afterward, reducing liquidity and trading capacity in the short term. However, the flushing of overstretched long positions can set a groundwork for consolidation or a short-term bottom once leverage recedes. The ZEC short squeeze shows the opposite dynamic in low-cap alts: rapid rallies can force short-covering and create outsized intraday moves. Traders should expect heightened volatility and fragile liquidity across derivatives markets: short-term impact is bearish for large-cap assets due to deleveraging pressure, while some altcoins may behave idiosyncratically. Long-term implications are neutral-to-bearish for risk sentiment until leverage and funding metrics normalize, but the event also reduces immediate crowded long exposure which can allow price recovery if macro conditions improve.