A massive wave of liquidations delivers a historic blow to cryptocurrency
05.02.2025
On February 3, the cryptocurrency market faced one of its sharpest crashes in recent times, driven by external economic factors. Following U.S. President Donald Trump's announcement of new tariffs on imports from China, Canada, Mexico, and the European Union, the total market capitalization plummeted by 11.7%, reaching $3.16 trillion. This sudden decline triggered a chain reaction of liquidations and a sharp drop in leading digital assets.The total amount of liquidations in the crypto market exceeded $2.5 billion in a single day, with $1.88 billion coming from long positions. XRP turned out to be one of the most vulnerable assets, losing $117.3 million, including $95.87 million in additional positions. The derivatives market faced significant pressure, reinforcing the downward trend and forcing traders to lock in losses.At the same time, an Ethereum trader managed to earn nearly $16 million by opening a short position with 50x leverage, from $3,388 to $3,000. Additionally, he secured $2.3 million in funding. However, such strategies are extremely risky: even the slightest mistake could have resulted in a complete loss of the deposit.