TLDR
- Over $1.8 billion in crypto positions were liquidated in one of the year’s largest market flush-outs
- Bitcoin fell below $112,000 and Ethereum below $4,150 as market cap dropped by $150 billion
- ETH liquidations ($500M) more than doubled BTC long position liquidations
- Options traders are positioning with bearish skew, expecting further downside this month
- Despite short-term bearishness, experts remain optimistic about Q4 and long-term outlook
The cryptocurrency market experienced a major correction on September 23, 2025, resulting in nearly $2 billion in liquidated positions across more than 370,000 traders. This marks one of the largest liquidation events of 2025, with the majority of losses concentrated in leveraged Ethereum and Bitcoin positions.
Data from CoinGlass shows that the crypto market capitalization fell by over $150 billion to a two-week low of $3.95 trillion. Bitcoin dropped below $112,000 on Coinbase, while Ethereum fell below $4,150, its largest pullback since mid-August.
Long positions on Ethereum saw liquidations topping $500 million, more than double the amount for Bitcoin long positions. This imbalance in altcoin leverage compared to Bitcoin may have contributed to the market downturn.
“When altcoin leverage gets this extreme, the market doesn’t ignore it,” explained researcher “Bull Theory.” “One sharp move down triggers cascading liquidations. That’s how you flush out weak hands and reset the board.”
Market Indicators and Technical Factors
The liquidation event appears to be driven more by technical factors than weakening market fundamentals. Real Vision founder Raoul Pal noted that this pattern is common in crypto markets, where traders get “levered long” ahead of an anticipated breakout, only to be liquidated when the first attempt fails.
Same thing happens all the time… the crypto market is focused on a big breakout, gets levered long ahead of it, it fails at first attempt so everyone gets liquidated… only then does the actual breakout occur, leaving everyone sidelined.
— Raoul Pal (@RaoulGMI) September 22, 2025
Despite the recent market rout, Bitcoin’s correction from its all-time high stands at just 9.5%, which is relatively shallow compared to previous bull market pullbacks. Bitcoin has fallen in 8 of the past 13 months of September but remains up around 4% so far this month.
IG market analyst Tony Sycamore told CoinTelegraph that Bitcoin could potentially dip back to the $105,000-$100,000 support zone, which includes the 200-day moving average at $103,700. He views this as a healthy correction that would “flush out a few of the weaker hands” and create “a nice buying opportunity for a run up into year-end.”
Options Market Response
Options traders have responded to the market downturn with increased put-buying activity, suggesting expectations of further downside this month. According to Sean Dawson, head of research at on-chain options platform Derive, there’s a “heightened demand for puts” as fears of continued downward price action worry the market.
The 1-week and 1-month put-call delta skew has reached its highest level since early August, indicating traders are positioning for short-to-medium-term downside. This metric measures the difference in implied volatility between out-of-the-money puts and calls with the same expiration date.
Some analysts attribute this bearish flow to “sell-the-news” expectations following the Federal Reserve’s quarter-point rate cut on September 17. While traditional assets like the S&P 500 and gold have shown positive returns since Fed Chair Jerome Powell’s dovish comments in August, Bitcoin and Ethereum have experienced negative returns during the same period.
Despite the recent volatility, implied volatility remains surprisingly low, suggesting that options traders aren’t expecting extreme price movements in the near term. Adam Chu, chief researcher at GreeksLive, noted that the market remains “optimistic about the fourth quarter,” with bullish positioning that began as early as last month.
Dawson expects prices to “trend inevitably upwards” over the next three to six months, with Ethereum potentially seeing a sharper recovery relative to Bitcoin due to market makers being net short gamma, which could force them to purchase spot ETH if prices move against their downside positions.
The current market correction may prove to be a temporary setback in what many analysts still view as a structural bull market. As Nassar Achkar, chief strategy officer at CoinW exchange, suggested, this flush-out “may present a near-term adjustment rather than a shift in the long-term structural bull run.”
For now, the dust appears to have settled, with major assets finding temporary support. However, traders remain cautious about the possibility of further volatility in the days ahead.
