A sharp drop in Bitcoin below the $80,000 level triggered a large-scale flush of leveraged crypto positions, with more than $815 million in liquidations over 24 hours and $404.15 million in long liquidations during a four-hour window, according to CoinGlass data cited in reporting. Bitcoin briefly traded around $79,280 before recovering above the key level, while more than 200,000 traders had positions closed.
The liquidation cascade was heavily concentrated in bullish bets. Long positions represented more than 94% of BTC liquidations and more than 92% of ETH liquidations. Over four hours, Bitcoin accounted for roughly $158.45 million in liquidations and Ethereum about $136.72 million. Binance recorded around $226 million in liquidated positions, while decentralized perpetual futures platform Hyperliquid saw about $70.47 million.
Derivatives data indicated that traders were reducing risk rather than adding new leverage. Crypto futures open interest fell approximately 2.2% to $140.1 billion. CoinDesk Research noted derivatives trading volume jumped 19% to $226.6 billion in a similar volatile session, while open interest declined 2.46%, a pattern consistent with position closures. Despite the pullback, derivatives remain the largest segment of centralized crypto trading: September centralized exchange derivatives volume reached $3.94 trillion, up 15.7% month over month, while spot volume rose 27.3% to $1.13 trillion.
Institutional derivatives expansion added to the backdrop. CME Group launched regulated Bitcoin Cash and Uniswap futures on October 19, including standard and Micro-sized contracts. Meanwhile, US access to crypto perpetual futures continued to broaden as Crypto.com and OG.com launched US crypto perpetual contracts with leverage of up to 5x.
The sell-off coincided with notable outflows from US spot Bitcoin ETFs. The funds recorded about $635.49 million in net outflows on Thursday and another $137.94 million on Friday, for a two-day total of roughly $773 million. The outflows followed three consecutive days of inflows earlier in the week, though the products retained about $304.73 million in net inflows across the full week.
The Federal Reserve began its two-day policy meeting while Bitcoin remained below $80,000 on October 27, keeping traders focused on inflation and interest-rate guidance. BitMEX co-founder Arthur Hayes said he had closed the directional trading book at his family office Maelstrom and taken profits on several tokens, including Ethereum, Ethena and Uniswap, citing macro and geopolitical uncertainty. The combination of elevated leverage, concentrated long positioning and macro catalysts left traders watching open interest, funding rates and liquidation levels for signs of the next volatility impulse.
