Crypto trader loses $220 million while Ethereum price crashes 17 percent

A single crypto trader has lost more than $220 million in a short time after the Ethereum price fell sharply.

The sharp drop led to a new wave of forced liquidations in the crypto market, wiping out a total of nearly $2.6 billion in positions. Investors who had bet on rising prices were particularly hit hard.

Ethereum price crashes, liquidations increase

A huge position in Ethereum (ETH) was liquidated on the derivatives platform Hyperliquid. The transaction, worth $222.65 million, was automatically closed after the ETH price fell by seventeen percent within 24 hours. According to data from CoinGlass, this was the largest individual liquidation in this decline.

The market had to deal with low liquidity, which made the decline particularly hard. Ethereum was in the spotlight, but other major coins such as Bitcoin (BTC) and Solana (SOL) also fell. In total, almost 435,000 traders were liquidated in one day.

Hyperliquid leads in losses

The majority of the liquidations concerned long positions, i.e. investors who were counting on rising prices. Of the total $2.58 billion in liquidations, about $2.42 billion came from long positions, compared to just $163 million from shorts.

Hyperliquid was hit hardest with $1.09 billion in liquidations, almost entirely from long positions. The platform was therefore responsible for more than forty percent of the total. Bybit ($574.8 million) and Binance ($258 million) also saw large losses.

Ethereum in the eye of the storm

Ethereum was the biggest loser, with more than $1.15 billion in liquidated positions. Bitcoin followed with $788 million. Solana was also hit hard, with liquidations worth nearly $200 million.

The extreme moves underline how vulnerable the crypto market currently is to liquidation-driven crashes, especially when trading volumes are low and derivatives markets reinforce each other.

What do liquidations say about market sentiment?

Liquidations occur when leveraged positions are automatically closed because the price falls too far. This can cause a snowball effect, with losses piling up quickly.

Many analysts use liquidation data as a sentiment indicator. Large long liquidations often indicate panic or an impending bottom. Short liquidations can actually precede short squeezes. Together with figures on open interest and funding rates, they provide insight into overcrowded positions and possible trend reversals.

Because liquidity in the market is low, these types of abrupt movements are increasing. Even relatively small price drops can then lead to massive liquidations and sudden crashes.