Crypto liquidations exceed $1.5 billion following Binance hack

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Crypto market selloff wipes out leveraged bets

Bitcoin and Ethereum account for the largest liquidations

Traders holding Bitcoin and Ethereum positions suffered the biggest losses. Bitcoin liquidations totaled approximately $499 million, while Ethereum accounted for another $358 million. Together, the two cryptocurrencies represented more than half of all forcibly closed positions.

Solana followed with $82.6 million in liquidations, XRP with $38.1 million, and Dogecoin with $18.6 million.

Among trading platforms, Binance recorded the highest liquidation volume. The exchange saw $754.6 million in positions forcibly closed, representing 49.2% of the market-wide total. Of that amount, $670.6 million came from long positions.

Liquidations on Hyperliquid reached $251.4 million, while Bybit recorded $186.5 million. The largest single liquidation tracked by CoinGlass was an $11 million Bitcoin long position on Binance.

Price recovery triggers losses for short sellers

After the initial plunge, the cryptocurrency market began to recover, triggering another wave of liquidations. This time, traders who had opened short positions in anticipation of further price declines came under pressure.

Over the past four hours, short positions accounted for approximately $57.3 million of the $85 million in total liquidations. Their share was even higher during the most recent hour, reaching $20.6 million out of $21.6 million, or roughly 95%.

This pattern reflects the mechanics of leveraged trading. When prices fall sharply, exchanges automatically close long positions held by traders who no longer have sufficient collateral. These forced closures generate additional selling pressure and can accelerate market declines.

The opposite happens when prices recover. Liquidating short positions requires buying back the underlying asset, creating additional demand that can push prices higher.

As a result, widespread use of leverage amplified cryptocurrency market volatility in both directions. The initial selloff triggered massive long liquidations, while the subsequent rebound forced traders betting on further declines to close their positions.

Binance has suffered major hacks before

This is not the first major security breach associated with Binance. In May 2019, hackers stole 7,000 BTC from the exchange, worth approximately $40 million at the time. The attackers used phishing, malware, and other techniques to gain access to users' API keys and two-factor authentication codes. The funds were withdrawn from the exchange's hot wallet in a single transaction. Binance covered the losses through its SAFU emergency reserve fund.

Another major incident occurred in October 2022, when attackers exploited the BSC Token Hub cross-chain bridge associated with the BNB Chain ecosystem. The vulnerability allowed the unauthorized creation of approximately $570 million worth of BNB tokens. To prevent further transfers of stolen funds, validators temporarily halted the blockchain. However, the attack targeted BNB Chain infrastructure rather than the Binance trading platform itself.

As a reminder, Binance has pledged to compensate users for their losses.

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