Bitcoin Stable, Altcoins Collapse In Major Purge

On July 24th, nearly one billion dollars of leveraged positions were liquidated within a few hours, triggering a wave of sell-offs on derivatives platforms. XRP, Dogecoin, Ethereum, and Solana all faltered, swept away by an overheating mechanism fueled by massive speculative bets. A dark day that reminds us how volatility remains the rule, not the exception, in the crypto universe.

Massive liquidations : the derivatives market purge

While Bitcoin regains its dominance, data provided by the CoinGlass platform is clear. Within 24 hours, $967 million worth of crypto derivative contracts were liquidated, including $829 million on long positions.

In other words, it was mainly investors betting on continued market rallies who were caught off guard. The overwhelming majority of liquidated positions were long. Indeed, this market reversal violently surprised a large number of operators.

This movement affected different cryptos unevenly, with some altcoins hit hard by this liquidation wave :

• Ethereum (ETH) : about $200 million liquidated, the hardest hit in the market ;
• XRP : $115 million, significant impact with a 10 % price drop ;
• Bitcoin (BTC) : $84 million, despite relative price stability ;
• Solana (SOL) : $58 million ;
• Dogecoin (DOGE) : $56 million, also with a 10 % drop.

The notable element of this series of liquidations is the lack of significant volatility in Bitcoin, often the trigger of widespread movements. This time, flows seem to have been redirected specifically away from altcoins, suggesting portfolio rebalancing or a short-term defensive strategy. The observed phenomenon is therefore not widespread panic, but a targeted purge of a market excessively exposed to leverage.

The weight of leverage and the frenzy of the altcoin market

Behind these raw numbers lies a deeper dynamic, highlighted this week by Glassnode in its report “The Week Onchain”. According to their data, the combined Open Interest on derivatives related to Ethereum, XRP, Dogecoin, and Solana rose from $26 billion in early July to $44 billion as of the 24th.

A meteoric rise that created a climate ripe for an explosion. “Excessive leverage almost inevitably leads to increased volatility,” notes the analysis from Glassnode’s on-chain team. It is this accumulation of open positions, in a fragile market context, that led to this generalized squeeze.

This overheating has been building slowly over several weeks, fueled by persistent bullish sentiment on altcoins, even as Bitcoin remained stable. This disconnect between speculative sentiment and market reality increased traders’ vulnerability to sudden changes.

Derivatives platforms, by enabling high leverage, allowed the stacking of risky bets, mechanically amplifying downward pressure at the slightest pullback. What was only a simple correction turned into a wave of automatic liquidations, in a market unable to absorb the intensity of outflows.

The implications of this purge are multiple. On one hand, it could mark the end of a speculative cycle on altcoins, with a return to more sustainable Open Interest levels. On the other hand, Bitcoin’s resilience in this context may strengthen its dominant position as the sector’s safe haven asset.