- Ether plunged as much as 9% in a single session on Monday, wiping out $500 million in leveraged long positions.
- Bitcoin traded about 0.8% lower, while nervous positioning was visible in the options market.
- Bitcoin and Ether options contracts worth $23 billion expire on Friday.
The sharp Monday sell-off erased more than $1.5 billion from leveraged crypto positions, underscoring how fragile digital-asset markets remain.
The sudden wave of liquidations — one of the largest this year — unfolded without an obvious catalyst and hit Ether particularly hard.
By Tuesday morning in Asia, the initial dust was settling, but prices remained under pressure and traders braced for further volatility as a record options expiry approached.
Monday crash sparked intense liquidations
On Monday, Ether led declines with losses up to 9%, triggering the unwinding of nearly $500 million in bullish bets.
Bitcoin also retreated, falling sharply before stabilizing with a smaller drop of about 0.8%.
Overall, exchanges saw more than $1.5 billion in leveraged positions forced out, marking one of the biggest liquidation events of the year after months of speculative rallies.
Analysts said the sell-off highlighted how quickly leverage combined with thin liquidity can cascade into a broad sell-down.
Tuesday session showed tentative resilience
By Tuesday morning in Asia the market was calmer, though sentiment remained cautious.
Ether trimmed losses to roughly 0.9%, while Bitcoin traded about 0.8% lower.
Options activity suggested traders were positioned for further swings rather than for calm, with sizable bets indicating potential moves for Bitcoin either below $95,000 or above $140,000 by month-end.
Demand for protection on both sides emphasized how volatile sentiment has become.
Expiring contracts add to pressure
Deribit data showed roughly $23 billion of Bitcoin and Ether options contracts expire on Friday, one of the largest expiry events on record.
The looming expiry increased caution across the market as traders expected volatility to dominate in the near term.
Short-dated options have grown popular as investors seek cheaper ways to hedge sudden price swings, effectively turning volatility itself into a tradable asset.
At the same time, crypto-treasury firms that had previously supported demand by raising funds to buy tokens have slowed their purchases.
With equity prices under pressure, these firms face reduced capital-raising capacity, which diminishes price support and amplifies downward pressure.
Leverage and liquidity risks persist
Binance data show open interest in perpetual futures has risen sharply in recent months, with Ether experiencing the strongest speculative activity.
That structure leaves the token more vulnerable to abrupt reversals, acting as a higher-beta gauge of digital-asset sentiment during stress periods.
Bitcoin, by contrast, has traded relatively steadier thanks to deeper liquidity and its growing role in institutional portfolios.
Still, analysts warn that elevated leverage across the system versus last year means the risk of large swings remains.
Some expect that potential Federal Reserve rate cuts could bring fresh inflows to offset selling pressure, but correlations between Bitcoin and equities suggest macro policy will continue to shape the market’s path.