Crypto crash wipes out $2.2 billion—worse than FTX and LUNA crashes combined

Crypto traders betting on higher prices just got wrecked as a market-wide liquidation event unfolded, wiping out over $2.2 billion in positions. The trigger for this chaos was a combination of panic induced by President Donald Trump’s newly imposed tariffs on China, Canada, and Mexico, alongside the broader market fragility. Bitcoin’s price plummeted to $91,200, while Ethereum crashed by 20% in just 24 hours, resulting in massive liquidations across the crypto market.

The sell-off led to the worst single-day liquidation event on record, surpassing the chaos of both the Terra (LUNA) collapse and FTX downfall. According to CoinGlass, futures traders were hit the hardest, with $1.87 billion in long positions liquidated compared to just $345 million in short positions as of February 3.

Ethereum took the brunt of the damage, with $600 million in ETH positions being liquidated. Bitcoin also saw significant losses, with $400 million in liquidations. Ethereum’s price dropped to $2,500, a steep 20% fall, while Bitcoin’s value dropped to $91,200 before slightly rebounding to $93,600, still down by 6.5% in a single day.

The carnage extended beyond Bitcoin and Ethereum. Altcoins were hit even harder, with many coins in the top 100 losing between 15% and 30% of their value in just 24 hours. This created widespread panic across the market, particularly as the amount of leverage used in the system meant that once the prices began to fall, liquidations snowballed, intensifying the downturn. The market, already fragile from recent volatility, couldn’t absorb the selling pressure fast enough.

One analyst compared the event to the Covid crash and warned traders not to “revenge trade” with leverage. He emphasized that now is a time for patience rather than reckless bets, advising against trying to quickly recover losses.

As for what’s next, the damage has already been done. The next few days will be critical to determining whether this sell-off was just a temporary shakeout or the beginning of a more significant market downturn. Traders and investors alike will need to tread carefully, as the market continues to grapple with uncertainty and volatility.