Cryptocurrency traders took a tough hit on Monday, as more than $1.5 billion worth of bullish bets got wiped out.

The sudden liquidation sparked a sharp selloff that hammered the market, especially smaller tokens that are generally more volatile.

The biggest losers were Ethereum and Bitcoin, with ETH tumbling nearly 9% to $4,075 after close to half a billion dollars of leveraged long positions were forced to close out.

Bitcoin lost almost 3%, slipping to around $111,998. The selloff was so intense that it dragged the total crypto market capitalization briefly below $4 trillion, rattling investors and causing panic among traders.

Ethereum took the brunt of the selloff. Nearly $500 million in leveraged long bets got liquidated, pushing its price down sharply by almost 9%.

This wasn’t just a small correction, as the forced selling triggered a cascade as margin calls piled up, causing traders to exit positions quickly.

Bitcoin also felt the pressure, falling nearly 3% after breaking below key support levels that had kept bulls hopeful.

The fallout wasn’t limited to the big two; altcoins like Solana and XRP also suffered sharp losses, with many smaller tokens dumping even harder due to their lower liquidity.

Over 400,000 traders lost their positions in just 24 hours, showing how quickly leveraged trades can unravel when the tide turns.

This brutal selloff came on the back of several factors. Many traders had been heavily leveraged in recent weeks, chasing gains on the back of a broader crypto rally.

When prices started slipping, those bets quickly turned sour. Heightened regulatory scrutiny, especially from the SEC targeting crypto ETFs and stablecoins, also dampened market confidence.

At the same time, uncertainty around global interest rates and economic conditions triggered risk-off sentiment that spilled into the crypto markets.

The total value of all cryptocurrencies briefly dipped under $4 trillion, erasing weeks of gains.

Although markets clawed back some losses later in the day, the rebound felt tentative.

Bitcoin’s market dominance ticked up a bit, indicating a rotation toward the largest, “safest” tokens, while smaller altcoins continued to bleed value.

Going forward, the market will be closely watching if major support levels as Ethereum near $4,200 and Bitcoin around $113,000, can hold.

If these levels falter, the selloff could deepen. Analysts warn that without fresh inflows from institutional investors or clearer regulatory signals, volatility will persist.

Traders who use leverage must be cautious, as even small moves can trigger further liquidations and sharp price swings. This episode highlights both the huge upside and the risks that come with trading cryptocurrencies.

In short, Monday’s liquidation wiped out billions and shook crypto markets worldwide.

It’s a reminder that these markets can be brutal and swift, underscoring the importance of managing risk and maintaining a clear head amid the noise.

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