According to data from CoinGlass, Bitcoin (BTC) traders betting on a price increase were hit the hardest, losing over $122 million. Meanwhile, Ethereum (ETH) traders saw nearly $100 million in liquidations. Smaller altcoins weren’t spared either, with more than $85 million in positions liquidated, marking the largest such event since July. Memecoin PEPE (PEPEUSDT) alone recorded an unusually high liquidation of $10 million.

Liquidations occur when traders using leverage are unable to meet their margin requirements, forcing exchanges to close their positions. Large-scale liquidations can often indicate extreme market conditions, such as panic selling or buying. Such events may signal a potential market turning point due to overreaction in sentiment.

The plunge in crypto prices coincided with geopolitical tensions, as Iran launched missile strikes on Israeli targets, leading to global risk assets and equities tumbling. Bitcoin fell to a low of $60,300 before recovering to $61,500 during Asian trading hours on Wednesday.

Futures traders experienced their worst losses since August, with nearly 86% of all futures bets being bullish. Many traders had been positioning for higher prices as October is historically a bullish month for Bitcoin, with only two negative months recorded since 2013.

While the market remains uncertain, this cascade of liquidations may suggest that a reversal could be on the horizon due to the overextended bullish sentiment seen in recent weeks.

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