The crypto markets recently experienced a brutal $19 billion liquidation wave that wiped out $380 billion in a matter of hours. Despite some signs of stabilization and accumulation, a potential recovery remains uncertain in a volatile market.
Historically, such meltdowns have often led to strong upturns. After the heavy crash, several major cryptocurrencies have shown strong signs of recovery.
Triggered by President Trump's announcement of 100% tariffs on Chinese goods, the crypto market experienced its sharpest fall ever. Nearly $19 billion in leveraged positions were liquidated, and hundreds of billions of dollars disappeared immediately.
This happened: Round-the-clock crypto trading with extreme leverage — sometimes up to 100 times — compounded rounds of liquidations and panic selling. Funding rates collapsed, open positions were reset, and many speculative positions disappeared.
Historically, such meltdowns have often led to strong upturns. After the heavy crash, several major cryptocurrencies have shown strong signs of recovery.
CoinGlass data shows that 24-hour liquidations reached nearly $20 billion, with the majority consisting of long positions. “The actual total is likely much higher -- Binance reports only one liquidation order per second,” CoinGlass wrote on X about the numbers. Over 1.6 million traders were liquidated in this record-breaking event, illustrating the massive forced de-leveraging that contributed to the price falls.
After the heavy crash, several major cryptocurrencies have shown strong signs of recovery. Bitcoin is now trading above $113,000, while Ethereum has passed $4,000 again. Volumes on larger exchanges have picked up, with increased activity in both the spot and derivatives markets. Nevertheless, the market is still characterized by high volatility, and more traders are hesitant to open new positions, which is reflected in the futures markets. Major players and institutions have begun to accumulate, but the market's direction is uncertain and dependent on further stabilization in the days ahead.
During the recent market turbulence, the DeFi platforms showed remarkable robustness. The AAVE protocol flawlessly liquidated a record-breaking amount of $180 million in collateral in only one hour without human intervention, a responsibility Stani Kulechov, its founder, called the protocol's largest-ever stress test. Similarly, Uniswap handled nearly $9 billion in trades amid the volatility, with no downtime. These automated, trustless systems allowed DeFi to handle massive liquidations and high volume efficiently, which for many underscores the technical robustness of decentralized finance.
In contrast, many centralized exchanges struggled during the same period. Binance, the world's largest crypto exchange, was heavily criticized as users reported frozen accounts, failed stop-loss orders and accusations of market manipulation. Several cryptocurrencies temporarily fell close to zero on Binance due to system delays in the extreme market traffic. Binance explained it with “intense market activity,” but users accused the platform of exacerbating the crash by disabling key features and making order books unresponsive. Similar issues were reported at Coinbase and Robinhood.
The next few days will reveal the extent of the losses, which companies are affected, and the extent to which listed crypto companies are affected. The industry is watching closely for signs of systemic risk or stabilization.
On a broader level, it remains to be seen whether Friday's crash marks the start of a new bear market in crypto — or if it's just another turn in what remains the most important bull market in crypto history. The answer depends on geopolitical developments, regulatory clarity and investor confidence in the weeks ahead.
