Bitcoin News Update: The Ripple Impact of Leverage: $1.2 Trillion Disappears Within Weeks

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Bitcoin News Update: The Ripple Impact of Leverage: $1.2 Trillion Disappears Within Weeks

Bitget-RWA2025/11/19 18:24

By:Bitget-RWA

- A trader lost $168 million in under an hour on HyperLiquid via leveraged shorts, later doubling down with $115 million in GMX bets. - $1.2 trillion vanished from crypto markets as leveraged positions amplified sell-offs, driven by fading Fed rate-cut hopes and inflation fears. - 20x-100x leverage made markets hypersensitive to price swings, with cascading liquidations triggering $1 billion in 24 hours. - Bitcoin’s $91,000 level and unresolved macro risks highlight ongoing fragility, mirroring past levera

The crypto market recently went through one of its most turbulent periods, with a leveraged trader suffering a $168 million loss on HyperLiquid in less than sixty minutes,

as reported by Coindesk

. This individual, who had previously wagered hundreds of thousands at crypto gambling sites like Stake and Roobet, placed a massive $168 million short position on

Bitcoin

XRP

, ZEC, and several other cryptocurrencies, just before prices rebounded over the weekend. Despite the huge loss, the trader quickly opened another $115 million in short positions on

GMX

a trade that remains open

and is currently showing $1.4 million in unrealized profits.

This event highlights a wider trend of aggressive leverage and risk-taking in crypto derivatives trading.

According to an analysis by Business Standard

, more than $1.2 trillion in market capitalization disappeared within weeks, fueled by factors like diminishing hopes for Federal Reserve rate cuts and a general risk-off mood in global stock markets. When prices move sharply, forced liquidations of leveraged positions can accelerate declines,

setting off feedback loops

that intensify sell-offs.

Coinpedia shared

that $1 billion in positions were liquidated in a single day as renewed inflation concerns led traders to close long bets, causing Bitcoin to plunge below $90,000.

The use of leverage further intensified the turmoil.

Bitcoin News Update: The Ripple Impact of Leverage: $1.2 Trillion Disappears Within Weeks image 0

BeInCrypto’s analysis

explained that extreme leverage—often between 20x and 100x—makes the market extremely reactive to even small price changes. A mere 2% shift can liquidate highly leveraged trades, and once liquidations start, they frequently trigger a chain reaction.

Bitcoinworld described

a $553 million liquidation event where 82.54% of Bitcoin’s forced closures were from long positions, showing widespread bullishness that quickly unraveled as the market turned.

Although the market saw a brief recovery, with crypto assets stabilizing around $3.13 trillion,

FXStreet observed

that Bitcoin’s price—hovering near $91,000—indicates ongoing downward pressure, with miners and institutional investors absorbing some of the impact. At the same time, uncertainty around Federal Reserve policy and global economic risks continue to fuel volatility.

This situation is reminiscent of previous collapses, such as

the $100 million loss by pseudonymous trader James Wynn

after taking long positions at market highs, and it underscores how fragile leveraged trades can be in markets with limited liquidity. With leverage still elevated and spot liquidity under strain,

more major liquidations seem likely

unless broader economic conditions improve.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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