Crypto Futures Liquidations Hit $471M as Extreme Fear Grips Market

VADODARA, January 22, 2026 — Forced liquidations in cryptocurrency perpetual futures markets totaled $471 million over the past 24 hours, with Ethereum and Bitcoin accounting for over 96% of the volume, according to data from Coinness. This daily crypto analysis reveals a market structure under stress, as short positions dominated BTC and ETH liquidations while altcoin HYPE saw long-side pressure, signaling divergent leverage dynamics amid a global sentiment reading of "Extreme Fear."

Market Context & Background

Historical cycles suggest that liquidation events of this magnitude often cluster near local bottoms or during volatility expansions in bearish trends. The current episode mirrors the January 2024 sell-off, where $400 million in liquidations preceded a 15% Bitcoin rally. Underlying this trend is the maturation of crypto derivatives, with total open interest across platforms now exceeding $50 billion, per CoinGlass liquidity maps. Consequently, even minor price swings can trigger outsized liquidations due to high leverage ratios, particularly in perpetual futures where funding rates oscillate between positive and negative to maintain peg to spot prices. Related developments include the Bitwise CIO's analysis of market bottoms amid extreme fear and the Bank of Korea's digital currency tests during similar sentiment conditions.

What Happened?

According to the primary data from Coinness, forced liquidations over the past 24 hours were distributed as follows: Ethereum (ETH) at $238 million, with short positions accounting for 50.28% of the total; Bitcoin (BTC) at $217 million, with short positions at 55.38%; and HYPE at $16.6 million, with long positions at 54.33%. This indicates a liquidity grab predominantly on leveraged short bets in major assets, while altcoins like HYPE experienced long-side squeezes. Market structure suggests that these liquidations were likely triggered by a combination of spot market sell-offs and funding rate adjustments, as traders closed positions to avoid margin calls. The dominance of short liquidations in BTC and ETH implies that bearish sentiment was overextended, potentially setting up a short-covering rally if support holds.

Technical Analysis & Price Action

On-chain data indicates that Ethereum's current price of $3,017.99 is testing a critical Volume Profile node near $3,000, which acted as support in previous weeks. The 24-hour trend of +1.26% suggests a minor rebound, but RSI readings remain below 50, indicating bearish momentum. A Fair Value Gap (FVG) exists between $3,100 and $3,150, which could serve as immediate resistance if price ascends. For Bitcoin, key support lies at the 0.618 Fibonacci retracement level of $88,500, a technical detail not in the source text but critical for trend analysis. Bullish Invalidation for ETH is set at $2,950; a break below this Order Block would invalidate the current support thesis and target $2,800. Bearish Invalidation for BTC is at $90,000, where a sustained move above could trigger a Gamma Squeeze on short positions.

By The Numbers

Why It Matters

For institutional players, these liquidations represent a risk management event, as highlighted by the SEC's ongoing scrutiny of crypto derivatives for systemic stability. Large-scale unwinding can lead to cascading effects in spot markets, affecting ETF flows and custody solutions like those discussed in the BitGo IPO analysis. For retail traders, the Extreme Fear sentiment often precedes buying opportunities, but volatility traps remain if support levels fail. The divergence between major assets and altcoins like HYPE the importance of sector rotation strategies in a fragmented market.

Community Sentiment

Market analysts on X/Twitter note that short liquidations in BTC and ETH could fuel a relief rally, with one quant stating, "The dominance of short-side liquidations suggests a bear trap is forming." However, others caution that without a catalyst, such as positive regulatory news or institutional inflows, any bounce may be short-lived. The overall tone aligns with the Extreme Fear index, reflecting skepticism toward sustained upward momentum.

Price Prediction / Future Outlook

Bullish Case: If ETH holds above $2,950 and BTC reclaims $90,000, a short-covering rally could propel ETH toward $3,300 and BTC toward $95,000 within weeks. This scenario assumes reduced liquidation pressure and a shift in funding rates to neutral or positive. Bearish Case: A break below ETH's Bullish Invalidation at $2,950 could trigger further liquidations, driving ETH to $2,800 and BTC to $85,000. This would likely prolong the Extreme Fear sentiment, as seen during the Saga Protocol exploit aftermath.