Crypto’s Chain Reaction: $1.5 Billion Wiped Out Amid Altcoin Collapse

Ethereum and

saw a dramatic downturn in September 2025, with market data revealing that over $1.5 billion in long positions were liquidated. plunged by almost 9% to $4,075, as roughly $500 million in leveraged trades were closed out, while Bitcoin slipped nearly 3% to $111,998. The wave of margin calls briefly dragged the total crypto market cap below $4 trillion, sparking widespread anxiety among investors Invezz [ 1 ]. Smaller coins such as and , faced even sharper declines due to thinner liquidity, with more than 400,000 traders seeing their positions wiped out within a single day Invezz [ 1 ].

Multiple factors contributed to the selloff. Many traders had taken on significant leverage during the preceding crypto rally, making their positions highly susceptible to price drops. Heightened regulatory attention—especially from the U.S. Securities and Exchange Commission (SEC) focusing on crypto ETFs and stablecoins—further undermined confidence. On top of that, global economic uncertainty and shifting interest rates added to the risk-averse mood that spilled over into digital assets Invezz [ 1 ].

Ethereum was hit hardest by the liquidations, with on-chain data showing $309.7 million in leveraged longs erased in just 24 hours. Bitcoin’s share of the market climbed to 56.4% as investors shifted toward larger, perceived safer assets amid the chaos Coingabbar [ 2 ]. The Fear and Greed Index, which measures market sentiment, dropped to 45 (Fear), signaling a swift move from optimism to caution among participants Coingabbar [ 2 ].

Experts linked the extreme volatility to inherent risks in leveraged trading. In a single day, liquidations topped $1.7 billion, with large investors (“whales”) intensifying price fluctuations. For example, one major wallet deposited $15 million in

on Hyperliquid to re-establish long positions in Bitcoin and Solana after the crash, highlighting how institutional players can amplify market movements Coingabbar [ 2 ].

Looking forward, the direction of the market will depend on whether key support levels hold. Ethereum must stay above $4,200 and Bitcoin near $113,000 to avoid further declines. Analysts caution that unless new institutional capital enters or regulatory clarity improves, volatility will likely remain high, especially for those trading with leverage Invezz [ 1 ].

This episode underscores the vulnerability of leveraged positions in the crypto sector. While Bitcoin’s dominance increased during the downturn, smaller altcoins continued to lag, with Ethereum’s market share falling to 12.7%. Market participants are now watching upcoming U.S. economic releases, including remarks from Federal Reserve Chair Jerome Powell and inflation data, for further cues on sentiment Coingabbar [ 2 ].

Invezz [ 1 ]: Invezz, "Crypto Markets Crash: $1.5B Liquidated as Ethereum, Bitcoin Lead Monday Selloff"

Coingabbar [ 2 ]: Coingabbar, "Why Crypto Is Down Today: Tariffs, Fed Cuts, and Whale Liquidations"