When you look at your screen this evening, the situation can be summed up in a single sentence: the market is shedding its leveraged positions. Over the last 24 hours, 58,837 investors have had their positions forcibly closed, resulting in a total of $176 million in liquidations—with long positions accounting for 54.4% of the total. Currently, BTC is trading around $77,100, ETH near $2,258, XRP around $1.24, and SOL near $92. This is not a "crash"; rather, it is a reckoning in areas where leveraged positions had become overly concentrated. That feeling of "here we go again"—which you might be experiencing—is exactly what everyone else using leverage in the market is feeling tonight.

"What Is Liquidation, and Why Should You Care?"

Liquidation occurs when an investor’s collateral for a leveraged position is depleted, prompting the exchange to automatically close that position. A liquidation of long positions—bets placed on a price increase—involving over $100 million means that thousands of such positions are being closed simultaneously. According to Coinglass data, the last 24 hours saw $41.1 million in BTC liquidations and $37.5 million in ETH liquidations. The chain reaction is straightforward: the price drops, long positions are liquidated, and the resulting sell-off pushes the price even lower. While this might look dramatic to someone who doesn't use leverage, it is, in fact, a moment of "cleansing" for the market. With the total open interest in the market hovering above $117 billion, this figure looms like a ghost haunting the system.

"Why Now? Three Layers Behind This Decline"

It would be a mistake to attribute the current situation to a single cause; consider it in three layers. The first layer is last week’s massive hack: following a $6.3 billion security breach, BTC briefly pulled back to $76,300, and institutional capital has yet to return—evidenced by a $643 million outflow from spot BTC ETFs on October 30. The second layer is the Federal Reserve’s hawkish stance; its tone heading into the November meeting is dampening risk appetite. The third layer is the calendar: the U.S. midterm elections are tomorrow, Apple is set to release its earnings report this evening, and employment data is due later this week. In an environment of heightened uncertainty, leveraged positions are the most vulnerable assets.

"ETH, XRP, and SOL: Why Did SOL Suffer More?"

You may have noticed that while BTC, ETH, and XRP have fallen by 1.1%, 0.3%, and 0.7% respectively, SOL stands out with a 2.7% decline. This is due to the distribution of liquidations: while most liquidations for BTC and ETH stem from short positions, 78.6% of liquidations among altcoins are coming from long positions. Furthermore, SOL spot ETFs saw $71.5 million in outflows last week—the largest weekly outflow since these ETFs were launched. In other words, leveraged "long" bets—placed atop an already weakening flow—triggered even sharper liquidations. The sluggish performance of major coins and the steep declines in altcoins are direct consequences of this chain of cause and effect.

"Probabilities: What Should We Watch Next?"

Without attempting to predict the direction, let’s outline potential scenarios based on the available data. With BTC hovering above its 100-day EMA ($77,761) and 200-day EMA ($76,460), the $80,000–$80,200 range acts as a resistance zone. From a technical standpoint, this means the price is currently at a "critical threshold." There are three key signals to monitor throughout the week: post-election risk appetite, whether ETF flows shift direction, and the potential return of institutional capital following the recent hack. Furthermore, the market’s "Fear & Greed Index" sits around 35—in the "fear" zone—suggesting that sentiment is currently driving the market; this implies that intense volatility could emerge at any moment, which should come as no surprise.

"What Does Tonight’s Market Action Tell the Retail Investor?"

Every major wave of liquidation reinforces a recurring lesson: leverage is the fastest way to lose money in the market. The liquidation of over $100 million in long positions means that, tonight, more than 58,000 individuals have paid a high price to learn this lesson. For an investor, the most rational response in moments like these is not panic, but rather a remarkable sense of calm. A cautious strategy entails managing position sizes without the use of leverage, balancing real-time data with a long-term perspective, and maintaining a mindset that remains as "unyielding" as possible within this framework.

This content is for informational purposes only and does not constitute investment advice.

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