Bitcoin Plunge Triggers $500M Long Liquidation Frenzy Across Major Exchanges

A sharp decline in Bitcoin's price during early Asian trading hours on Monday, December 1, 2025, forced the liquidation of nearly $646 million in leveraged crypto positions, with bullish bets accounting for almost 90% of the total wipeout.

The crypto market faced a severe leverage flush as Bitcoin fell more than 5% to around $86,000 and Ether slid over 6% to near $2,815. Data from Coinglass reveals that the cascade of forced position closures was concentrated on major exchanges, with Binance, Hyperliquid, and Bybit each recording over $160 million in liquidations. This event extended losses from a bruising November close, dragging major assets back toward the lower end of their recent trading ranges and highlighting the persistent fragility of market sentiment amid thin liquidity and macro uncertainty.

Anatomy of a Liquidation Cascade: $646 Million Wiped Out

The core mechanism behind Monday's market move was a massive wave of long liquidations. In cryptocurrency trading, liquidation occurs when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. This happens when the trader lacks sufficient funds to meet the margin requirements to keep the trade open.

On December 1, 2025, this process unfolded on a massive scale. Coinglass data showed that longs made up almost 90% of the total $646 million in liquidations, meaning the vast majority of positions closed were bets on higher prices. The scale was significant, with the largest single liquidation event being a $14.48 million ETH-USDC order on Binance. The concentration of liquidations across Binance, Hyperliquid, and Bybit indicates where heavy bullish positioning had accumulated prior to the drop.

Exchange Breakdown: Binance, Hyperliquid, and Bybit Lead Liquidations

The distribution of liquidations provides a clear picture of where leveraged risk was most concentrated. According to the data, three platforms bore the brunt of the forced selling:

• Binance: The global exchange giant saw over $160 million in liquidations.
• Hyperliquid: This perpetual futures-focused decentralized exchange (DEX) also recorded over $160 million in liquidations.
• Bybit: The derivatives-heavy centralized exchange similarly experienced over $160 million in liquidations.

The fact that both centralized giants (Binance, Bybit) and a leading perpetuals DEX (Hyperliquid) faced nearly identical liquidation volumes underscores how pervasive leveraged long positioning had become across different types of trading venues. This multi-platform purge suggests a broad-based unwinding of bullish sentiment rather than an issue isolated to a single exchange.

Market Context: A Struggle for Stability After November's Drawdown

Monday's liquidation frenzy did not occur in a vacuum. It followed a pattern established during earlier selloffs in 2025 and capped off a difficult period for crypto markets. The report notes that the market had been struggling to stabilize after a rapid drawdown through late November, driven by a combination of macro signals, ETF outflows, and weak weekend volumes.

The sequence is familiar: heavy long exposure builds as prices approach key resistance levels, funding rates shift, and then a sudden price move triggers a cascade of forced selling that amplifies losses within hours. The December 1 event followed this exact blueprint, with the sell-off accelerating during the thin liquidity of the Asian trading session. Following the rout, open interest across BTC and ETH perpetuals slipped further, indicating that the leverage built up during rallies earlier in Q4 2025 continues to be washed out of the system.

Altcoins Follow Bitcoin Lower Amid Broad Sell-Off

The pressure was not limited to Bitcoin and Ethereum. The downward move spread across large-cap altcoins, exacerbating total market losses. In the same period:

• Solana (SOL), XRP (XRP), BNB (BNB), and Dogecoin (DOGE) dropped between 4% and 7%.
• Cardano (ADA) and Lido Staked Ether (stETH) posted deeper losses.

This correlated decline highlights how leveraged positions across the crypto spectrum were impacted. Furthermore, separate news regarding Dogecoin illustrated specific altcoin challenges. Dogecoin had dropped nearly 8% after breaking a crucial support level, and the recent launch of DOGE ETFs from Grayscale and Bitwise saw only $2.16 million in inflows, failing to attract the level of institutional interest some market participants had anticipated.

Historical Parallels and Market Mechanics

Liquidation cascades are a recurring feature of crypto's volatile leverage markets. Monday's purge followed what traders identified as the same pattern seen during earlier selloffs this year. These events often indicate market extremes where sentiment has overshot in one direction. Historically, such large-scale flushing of leverage, while painful for affected traders, can reset market conditions by removing overextended positions. This can sometimes set the stage for a price reversal as selling pressure from liquidations exhausts itself.

The current environment shares characteristics with past deleveraging periods: a rapid price decline triggers margin calls, which force sell orders that drive prices down further, triggering more margin calls in a negative feedback loop. The speed of such moves is often accelerated by thin liquidity, which was cited as a contributor alongside ongoing macro uncertainty.

Strategic Conclusion: Cleaner Positioning Amid Fragile Sentiment

The December 1 liquidation event served as a stark reminder of the risks associated with high leverage in volatile asset markets. While nearly $646 million in positions were wiped out, primarily long bets on major exchanges like Binance, Hyperliquid, and Bybit, the aftermath presents a mixed picture.

On one hand, analysts note that positioning now looks cleaner following the washout, as open interest has declined and excessive bullish leverage has been reduced. This can create a more stable foundation for price movement. On the other hand, risk appetite remains fragile. Traders have pointed out that until liquidity improves—typically during the active U.S. trading session—intraday price swings are likely to remain elevated.

For market participants, the key takeaways are to monitor derivatives metrics like aggregate open interest and funding rates for signs of re-leveraging, watch for stabilization in Bitcoin and Ethereum prices as bellwethers for broader market sentiment, and be cognizant of how macro developments continue to influence crypto asset volatility. The market's next test will be its ability to hold support levels and attract sustained buying interest without relying on the unstable foundation of overcrowded leveraged positions.