Bitcoin and Ethereum Shorts Liquidated Over $112M

• Bitcoin short positions accounted for 62.66% of $49.14M in liquidations over 24 hours.
• Ethereum saw 67.34% of $47.23M liquidations from shorts, indicating bearish sentiment capitulation.
• Global crypto sentiment remains in "Extreme Fear" territory at 25/100, similar to 2021 correction patterns.
• Market structure suggests a potential liquidity grab above Fibonacci support at $82,000.

VADODARA, December 22, 2025 — Forced liquidations in cryptocurrency perpetual futures markets totaled over $112 million in the past 24 hours, with short positions in Bitcoin and Ethereum dominating the carnage. This daily crypto analysis reveals a market structure reminiscent of the 2021 correction, where aggressive shorting preceded violent squeezes. Bitcoin liquidations reached $49.14 million, with shorts comprising 62.66%, while Ethereum saw $47.23 million liquidated, 67.34% from shorts. In contrast, LIGHT experienced $16.31 million in liquidations, predominantly from long positions at 51.43%.

Market Context & Background

Market structure suggests this liquidation event mirrors the 2021 correction, where excessive short positioning led to a gamma squeeze that propelled Bitcoin from $30,000 to $69,000. According to on-chain data, similar patterns emerge when the Fear & Greed Index dips below 30, as seen today at 25/100. Historical volume profile analysis indicates that such short-dominated liquidations often precede trend reversals, as weak hands are flushed from the system. The current environment parallels the post-2022 bear market recovery, where EIP-4844 implementation on Ethereum reduced layer-2 costs, driving institutional interest despite retail fear.

Related developments include recent futures market activity, such as ASTER's $12M futures competition testing market structure, and Bitget's VIP overhaul targeting institutional liquidity. These events highlight growing sophistication in derivatives markets, potentially exacerbating liquidation volatility.

What Happened?

On December 22, 2025, cryptocurrency perpetual futures markets witnessed $112.68 million in forced liquidations across major assets. According to the source data, Bitcoin accounted for $49.14 million, with short positions making up 62.66% of the total. Ethereum followed with $47.23 million, where shorts represented 67.34%. This indicates that bearish traders were aggressively betting against these assets, only to be liquidated as prices moved against them. LIGHT, a smaller asset, saw $16.31 million in liquidations, but with long positions at 51.43%, suggesting a different sentiment dynamic. Market analysts attribute this to a combination of technical breakdowns and macroeconomic uncertainty, as the Federal Reserve's stance on interest rates remains hawkish, impacting risk assets.

Technical Analysis & Price Action

Bitcoin's current price sits at $88,440, with a 24-hour trend of 0.60%. Market structure suggests a liquidity grab above the Fibonacci 0.618 support level at $82,000, which aligns with the 200-day moving average. The Relative Strength Index (RSI) on daily charts hovers near 45, indicating neutral momentum but with potential for oversold conditions if prices dip further. A fair value gap (FVG) exists between $85,000 and $90,000, likely acting as a magnet for price action. Order block analysis reveals significant sell-side liquidity around $92,000, which could serve as resistance. Bullish invalidation is set at $82,000; a break below this level would negate the short squeeze thesis and target $78,000. Bearish invalidation lies at $92,000; a sustained move above would confirm a trend reversal and target $95,000.

By The Numbers

Why It Matters

For institutional investors, this liquidation event signals a potential inflection point. High short liquidations often precede bullish reversals, as seen in historical data from the Commodity Futures Trading Commission (CFTC). Institutions may interpret this as a buying opportunity, especially with Bitcoin's market rank at #1 and Ethereum's upcoming network upgrades. Retail traders, however, face increased volatility; the dominance of shorts suggests many were caught off-guard, potentially leading to further capitulation. The impact extends to altcoins, as evidenced by LIGHT's long-dominated liquidations, indicating divergent sentiment across assets. In the 5-year horizon, such events reinforce the importance of risk management in leveraged markets, as regulatory scrutiny on derivatives intensifies globally.

Community Sentiment

On X/Twitter, market analysts are divided. Bulls highlight the short squeeze potential, with one noting, "Liquidity grabs like this often mark local bottoms." Bears caution against reading too much into single-day data, pointing to macroeconomic headwinds such as the Fed Funds Rate remaining elevated. Industry leaders avoid specific predictions, but sentiment leans toward cautious optimism, with many referencing the 2021 analogy. No direct quotes from figures like Michael Saylor or Cathie Wood are available, but overall, the community views this as a technical reset rather than a fundamental shift.

Price Prediction / Future Outlook

Bullish Case: If Bitcoin holds above $82,000, market structure suggests a gamma squeeze toward $95,000. Short covering could fuel a rally, with Ethereum following to $3,200. This scenario assumes no adverse macroeconomic shocks and sustained institutional inflow, similar to post-2020 recovery patterns.

Bearish Case: A break below $82,000 invalidates the bullish thesis, targeting $78,000 and potentially $75,000. Ethereum could drop to $2,500. This would align with prolonged "Extreme Fear" sentiment and increased liquidations from long positions, mirroring the 2022 bear market.

FAQs

What caused the $112M in liquidations? Forced liquidations occurred due to price movements against leveraged positions in perpetual futures markets, primarily from short bets on Bitcoin and Ethereum.

How does this compare to past events? Similar to the 2021 correction, where short liquidations preceded a major rally, indicating potential trend reversal signals.

What is a liquidity grab? A market move designed to trigger stop-losses and liquidations, often seen before significant price shifts, as analyzed in order block theory.

Why is global crypto sentiment in "Extreme Fear"? The Fear & Greed Index scores 25/100 due to macroeconomic uncertainty and recent price volatility, reflecting retail panic.

What should traders watch next? Key levels include Bitcoin's $82,000 support and $92,000 resistance, along with Ethereum's $2,800 and $3,200 levels for confirmation of direction.

Data source: Read Original Report

Source Note: Market data and factual reporting in this article are sourced from original reports. Commentary and analysis provided by CoinMarketBuzz.