Yesterday’s market wasn’t a dip—it was a demolition. Traders found themselves scrambling to close at losses or getting stopped out outrightly. 

In what’s being called the biggest liquidation event in crypto history, over $19 billion in leveraged positions were wiped out within hours, with 1.6 million traders liquidated as the market cascaded violently.

At the core of it all? A single trigger: U.S. President Donald Trump’s new tariffs on Chinese imports, which sent traditional markets tumbling and dragged crypto down with them.

Within 10 minutes, $500 billion in crypto market cap vanished, marking one of the fastest drawdowns since 2021.

Solana’s Brutal Hit: $2B in Liquidations, 20% Plunge

Solana faced one of its toughest days this year.

Over $2 billion in SOL liquidations hit in just 12 hours, including $400 million on-chain as volatility ripped through DEXs and perps. The price crashed below $222, breaking critical support and triggering mass panic.

Liquidity pools briefly went dark—order books vanished for nearly an hour—sending shockwaves through the ecosystem. SOL fell over 20% intraday, while SUI, Cardano, and smaller L1s cratered up to 80%.

Even Solana’s legendary throughput (10,000+ TPS) couldn’t stop the sentiment bleed.

As one trader put it:

“TPS doesn’t matter when everyone’s broke.”

Meanwhile, Hyperliquid saw $10B liquidations, Bybit $4.5B, and Binance $2.5B, though throttled APIs suggest the real figure may exceed $30B once cross-margin data settles.

Ecosystem Fallout: DeFi Depegs, Altcoin Extinction

It wasn’t just perps—DeFi got nuked too.

Chainlink and Pyth both reported temporary oracle delays that led to false liquidation events across multiple protocols.

• Ethena’s USDe depegged to $0.66.
  
• bnSOL and wETH followed suit.
  
• AVAX dropped 71%—the largest single-day liquidation in its history.
  

And while most of the market bled, Zcash soared 40% as short sellers got vaporized in a rare privacy-coin short squeeze.

Spot ETFs briefly offered relief with $1.9B inflows, but the liquidity vacuum was too deep to fill.

The Spark: Tariffs, Leverage, and No Bids

The trigger may have been Trump’s tariffs, but the fire was already smoldering.

Overleveraged longs, thin liquidity, and high funding rates created a setup for collapse. When Bitcoin broke $113K, cross-margin collateral in alts auto-liquidated, forcing a wave of forced sells that cascaded through every layer of the market.

Even Solana’s upcoming ETF approval delays added fuel to the panic.

In short: the market didn’t just fall—it folded in on itself.

What Happens Next? Purge or Prelude?

Some traders see opportunity in the ashes.

Bulls argue the flush was overdue—a cleansing that clears leverage for a new rally. Bears, meanwhile, warn that the scale of unrealized losses means the pain isn’t done.

Whichever camp you’re in, one truth remains:

“High leverage + thin liquidity = liquidation lottery.”

Infrastructure platforms like Hyperliquid and Morpho handled the chaos smoothly, proving that strong tech still matters when the crowd panics.

The SolCypher Angle

At SolCypher, we’ve been watching this unfold up close.

Bots on our ecosystem executed thousands of successful exit trades, showcasing what happens when tools are built by traders, for traders.

No downtime. No lag. Just raw execution.

In times like this, that’s the difference between surviving the purge… and being part of it.

💜 Trade smart. Trade SolCypher.

👉 solcypher.ai