Macro Shock Triggers Fresh Wave of Crypto Liquidations
Mara Jensen
November 3, 2025
“When macro shockwaves collide with crowded positioning, the first domino is always leverage,” noted Grant Holloway, head of derivatives at Lattice Trading.
Selloff Recap
Crypto markets shed between 3% and 7% intraday as leverage reset across major venues. Liquidations approached the mid-hundreds of millions of dollars, with bitcoin sliding toward $101,000 before dip buyers emerged. Ether and large-cap altcoins mirrored the move lower, though spot volumes remained orderly.
Market structure analysts say the selloff served as a reality check after October’s rally, reinforcing the idea that crypto still trades as a high-beta proxy for broader risk sentiment.
Macro Drivers
The downdraft followed Fed officials signaling patience on rate cuts and renewed chatter around tariff measures tied to strategic industries. Equity futures slipped, and Treasury yields climbed, forcing systematic strategies to reduce exposure.
Traders also pointed to energy prices ticking higher, a combo that tends to lift the dollar and sap demand for risk assets. The backdrop echoes conditions earlier this year when leverage became a double-edged sword for bitcoin bulls.
How the Liquidations Unfolded
Funding rates flipped negative across major perpetual swaps as exchanges auto-delevered long positions. Basis spreads on CME futures tightened sharply, reflecting hedging demand from U.S. institutions. Options desks reported skew snapping toward protective calls while realized volatility spiked.
Liquidity remained deeper than during the summer’s rout, in part because dealers had already trimmed risk ahead of expected tariff headlines. Still, the episode underscores how quickly leverage can cascade when macro signals turn sour.
ETF Context
ETF flows were mixed. Spot bitcoin funds saw modest creations, while ether products recorded light redemptions. Analysts said investors remain focused on whether new vehicles, such as the recently listed Solana ETFs, can sustain inflows through turbulence.
Desks also highlighted cross-asset hedges, with some investors rotating into gold ETFs and defensive equity sectors as macro jitters spread.
Levels to Watch
Traders are eyeing bitcoin support around $98,000–$103,000 as a sentiment gauge. A decisive break could invite another wave of forced selling. For ether, the $5,100 level remains key, while Solana bulls want to defend $165 after last week’s ETF-fueled turbulence.
Volatility sellers are waiting for implieds to drift lower before reloading, suggesting markets may stay choppy through the next macro data releases.