Crypto’s worst two-day liquidation in months deepens as investors chase the AI trade elsewhere

The crypto market succumbed to a wave of selling pressure and liquidations on Thursday, with bitcoin BTC$62,505.85 tumbling to around $61,300 at 02:00 UTC before recovering to as high as $64,680. It recently traded around $62,500.

Ether (ETH) lost 3% since midnight UTC, now trading at around $1,750. Several other altcoins saw deeper declines, with NEAR, ZEC and JUP all losing more than 13%.

The downside move triggered a wave of liquidations with $1.7 billion worth of futures positions being forcibly closed due to the slide, $750 million worth of that can be attributed to bitcoin, $390 million to ether.

Investors appear to be deserting crypto to pursue the AI narrative in traditional markets, exacerbating the geopolitical uncertainty and a fundamentally broken market structure that has failed to recover from October’s leverage wipeout.

Derivatives positioning

• Total 24-hour futures volume rose 2.9% to $305 billion, an increase that reflects elevated but not panicked activity. More telling is open interest, which declined 8.5% to $111.4 billion, a sign that leveraged positions are being unwound rather than fresh bets being added.
• Liquidations have been severe: Roughly $3 billion in leveraged positions have been wiped out over the past two days, with the 24-hour tally alone reaching $1.7 billion.
• Bitcoin’s open interest has pulled back to 766,000 BTC from yesterday’s record highs above 800,000 BTC. The decline suggests the price plunge has flushed out a significant portion of leveraged longs and that bears are not aggressively building new directional bets, at least not in BTC. The same dynamic holds for ether (ETH) and XRP.
• Solana is a notable exception. Open interest in SOL surged to a record 72.16 million tokens even as prices declined, a combination that typically signals an influx of short positions. The sentiment is understandable given SOL dropped below its February low while BTC, ETH and XRP held above theirs.
• TRX and ADA are also seeing open interest rise as their prices fall, suggesting similar short-side accumulation in those markets.
• Derivatives’ broader tone confirms the bearish tilt. The 24-hour cumulative volume delta across the top 20 tokens is negative, meaning traders are selling at market prices rather than limit orders. This active, aggressive bearish participation suggests potential for deeper losses.
• Implied volatility is rising in tandem. Volmex’s 30-day implied volatility indexes for bitcoin (BVIV) and ether (EVIV) have surged over the past three sessions, reflecting growing demand for options-based hedging and heightened expectations of continued price swings.
• Put skews have strengthened in both bitcoin and ether, signaling that investors are willing to pay a premium for downside protection. The $60,000 strike put on Deribit carries over $1 billion in notional open interest. As spot prices approach that strike, large position adjustments become increasingly likely, which could amplify volatility.
• The $55,000 put was the most actively traded options contract in the past 24 hours. The message from derivatives markets is unambiguous: Sentiment is bearish.

Token talk

• The altcoin market underperformed crypto majors on Thursday. Even recent darling HYPE lost 12% after hitting a record high earlier this week.
• DASH, ENA and FET also fell by more than 10% since midnight UTC as the lack of liquidity in altcoin pairs reared its head again.
• Market depth is typically much lower on altcoin pairs than on bitcoin or ether, so the amount of capital it takes to move prices in either direction is relatively low. Pair that with a wave of liquidations and the asset simply can’t maintain the level of supply, causing exaggerated price moves to the downside.
• Monero (XMR), despite being down by 4% since midnight, is still in the black over 24 hours. Trading at $347, it is seemingly unperturbed by the broader market crash.
• Much of the altcoin trajectory will depend on bitcoin’s ability to hold above $60,000. A break below that could trigger further liquidations, which would weigh more on the illiquid altcoin pairs.