Crypto Liquidations Hit XRP, ETH and SOL as SEC Advances Blockchain Rules
Crypto liquidations reached $369.67 million on 2 September, with more than 90,000 leveraged traders affected. Long positions accounted for $301.84 million, indicating a sharp long squeeze across major digital assets.
Bitcoin fell 1.3%–1.8% to around $77,200–$77,600, while Ethereum dropped about 2% to $2,410–$2,430. Solana slipped below $100 to $98.47. XRP also declined amid a scheduled escrow unlock. ETH recorded the largest single liquidation, an $11.99 million Binance position.
The sell-off was linked to WTI crude oil rising above $90–$92 a barrel and 10-year US Treasury yields reaching about 4.78%–4.79%. Markets raised the probability of a Federal Reserve rate hike on 16 September to 66%, pressuring risk assets. Total crypto market capitalisation fell to roughly $2.59 trillion–$2.70 trillion.
Despite the crypto liquidations, spot ETFs for ETH, SOL and XRP recorded net inflows of $10.95 million, $10.19 million and $14.38 million respectively. Bitcoin ETFs saw $236.46 million in outflows. Filecoin and Uniswap outperformed, gaining about 14%–15% and 11%.
Separately, the SEC proposed revising transfer-agent rules for public blockchains, tokenised stocks and artificial intelligence. A 17 September roundtable with BlackRock, Nasdaq, NYSE, Robinhood and other firms will examine 24-hour stock trading and settlement. The regulatory move could accelerate long-term integration between traditional finance and digital assets, but near-term trading conditions remain vulnerable to macroeconomic data and further leverage unwinding. Crypto liquidations and US unemployment data due on 3 September are key risks for traders.
Bearish
The immediate market signal is bearish. A $369.67 million liquidation wave, dominated by long positions, shows that leveraged traders were caught on the wrong side of a macro-driven decline. Higher oil prices, rising Treasury yields and a 66% implied probability of a Federal Reserve rate hike reduce demand for speculative assets. The declines in BTC, ETH, SOL and XRP, combined with weaker total market capitalisation, could encourage further deleveraging if key support levels fail.
This pattern resembles previous risk-off episodes in which inflation concerns or expectations of tighter monetary policy triggered large derivatives liquidations. Such events often produce short-term volatility, cascading stop-loss orders and wider price swings. US unemployment data could either intensify or ease the pressure, depending on its effect on rate expectations.
There are, however, countervailing signals. ETH, SOL and XRP ETFs continued to attract capital, and long-term Bitcoin holders reportedly returned as net buyers. These flows suggest institutional demand has not disappeared and could support a later recovery once leverage is reset.
The SEC’s proposed blockchain and tokenisation rules are potentially constructive over the long term because clearer infrastructure rules may attract banks, exchanges and asset managers. In the short term, regulatory uncertainty and the prospect of traditional markets adopting 24-hour trading could redirect liquidity and increase competition for crypto trading activity. Overall, near-term downside and volatility outweigh the longer-term institutional adoption benefits.