- Ether plunged as much as 9% in a single session on Monday, wiping out USD 500 million in bullish bets.
- Bitcoin traded down about 0.8%, with option positions reflecting nervousness.
- About USD 23 billion in Bitcoin and Ether contracts will expire on Friday.
A sharp sell-off on Monday erased more than USD 1.5 billion from leveraged cryptocurrency positions, underscoring how fragile digital-asset markets remain.
The sudden wave of liquidations—one of the largest of the year—unfolded without an obvious catalyst and hit Ether particularly hard.
By Tuesday morning in Asia the initial shock had begun to subside, but prices remained under pressure as traders braced for further volatility ahead of a record options expiry.
Monday’s crash triggers heavy liquidations
On Monday, Ether led the declines, dropping up to 9% and reversing nearly USD 500 million in bullish wagers.
Bitcoin also pulled back sharply before stabilizing, ending the session around 0.8% lower.
In total, more than USD 1.5 billion in leveraged positions were wiped out across exchanges, marking one of the biggest liquidation events this year after months of speculative gains.
Analysts said the move highlighted how quickly leverage combined with thin liquidity can cascade into broad selling.
Tuesday session shows nervous calm
By Tuesday morning in Asia, markets were calmer though sentiment remained cautious.
Ether trimmed losses to roughly 0.9%, while Bitcoin traded about 0.8% lower.
Options activity suggested traders were positioning for further swings rather than stable conditions, with significant bets placed on Bitcoin either falling below USD 95,000 or rising above USD 140,000 before month-end.
Demand for protection on both sides revealed how volatile sentiment has become.
Expiring contracts add to the pressure
Data from Deribit showed roughly USD 23 billion of Bitcoin and Ether options contracts set to expire on Friday, making this one of the largest expiries on record.
The looming expiry has heightened caution across the market, with traders expecting elevated volatility in the near term.
Short-dated options have grown in popularity as investors seek cheaper exposure to abrupt price moves, effectively turning volatility itself into a trading opportunity.
At the same time, crypto treasury firms that previously supported demand by raising funds to buy tokens have slowed their purchases.
With equity prices down, these firms face reduced capacity to raise capital, limiting their ability to prop up token prices and adding downward pressure.
Leverage and liquidity risks persist
Binance data show open interest in perpetual futures has risen in recent months, with Ether experiencing the most intense speculative activity.
That structure has left the token more exposed to sharp reversals, making it behave like a higher-beta proxy for digital-asset sentiment during stress periods.
By contrast, Bitcoin has traded with relative stability thanks to deeper liquidity and a growing role in institutional portfolios.
Still, analysts warn that elevated leverage levels across the system versus last year mean the risk of large swings remains.
Some market participants hope that anticipated Federal Reserve rate cuts will draw new inflows and offset selling pressure, but correlations between Bitcoin and equities suggest macro policy will continue to shape its trajectory.