Crypto Chaos: How a $700M Thinning of the Herd Wasn’t All Doom & Gloom

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Well now, seems like the world of crypto took a tumble faster than a chicken off a junebug. Bitcoin, Ethereum, XRP, and Solana, all taking a nosedive — and folks aren’t crying foul because some new bearish tide rolled in. Nope, this was more about a bunch of traders throwing in the towel ’cause their leveraged bulls got spooked. It’s what they call a “long squeeze,” and it’s about as pleasant as a root canal without anesthesia.

What’s a Long Squeeze Anyway? And Why Now?

Imagine piling on leverage like a kid climbing a tree, thinking he’s got a good grip, until the branch snaps. That’s what a long squeeze does to traders who bet big that prices would go higher, only to find out they might’ve overplayed their hand. As prices started falling—like apples off a falling tree—they hurried to exit their positions, often at a loss, causing the market to slide even further. It’s less about folks flipping bearish and more about those whose shorts were unlocked and sent packing.

This drama played out Thursday like a bad soap opera. Bitcoin, which was snoozing just below $120,000, slipped a smidge. Ethereum drifted down 3%, Solana took an 8% tumble, and XRP, well, XRP took the cake with a 13% fall. Overall, the crypto market dipped nearly 7%, but don’t be fooled — this ain’t a sign the bears are moving in for good. Nope, it’s just the market shaking out some loose change.

A whopping $700 million worth of leveraged longs evaporated faster than snow on a hot skillet, mostly in ETH and XRP. And just to throw a little spice into the mix, Bitcoin’s dominance jumped 1.57% after a nine-day slumber, and that, my friend, set off a chain reaction of liquidations across the board.

1/ Over $700M in leveraged longs liquidated in 24 hours
ETH and XRP were the main troublemakers now

But the real kicker is $BTC.D climbing +1.57% after nine days of snoozing

This jolted the market, setting off a domino effect of liquidations across alts

Bitcoin held up well—looks like a…

— Aaron Dishner (@MooninPapa) July 24, 2025

Open Interest—The Clues That Longs Are Saying Goodbye

If you’re scratching your head trying to understand what all this means, just look at open interest — the number of active contracts in the market. That number’s been dropping faster than a stone. XRP’s futures interest dropped over 6% in a couple of days, Solana’s and Ethereum’s each lost a little, and Bitcoin trimmed a bit more than 1.5%.

Now, if folks were panicking to short the market, we’d see open interest climbing. Instead, it’s shrinking, a clear sign that traders are closing out their bets, not opening new ones on the short side. And with funding rates still positive—meaning most traders still believe prices will go up—this was more about letting go of over-leveraged positions than giving up entirely.

Don’t Fret—It’s Not All Bad News

You might think a dip like this spells doom, but sometimes a good ol’ market shake-up is just what the doctor ordered. The general mood is still about as cheerful as a Sunday picnic, with the Fear & Greed index sitting comfortably at 67 out of 100. That’s pretty neutral-to-bullish, indicating most folk still got their optimism intact.

All this fuss about liquidation means some folks were riding a little too high on leveraged bets. Clearing out those frothies might just pave the way for a sturdier, healthier market. No sign of widespread panic or new short-selling rampages — it’s more like technical turbulence than emotional upheaval.

Long story short, prices may look lower than a snake’s belly, but the bulls aren’t out of breath yet. Might just be the market giving a good shake before it tries to climb higher again — like a mule that’s just had enough but will come back fresh tomorrow.

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FAQs

What caused this recent crypto tumble? Well, it was a classic case of a long squeeze—leveraged traders puking out their bets rather than some new bearish storm.

How much got liquidated? Over $700 million, mostly ETH and XRP, gone faster than a banked critter.

Does falling open interest mean the market’s turning bearish? Nope, it just shows traders are closing out longs, not rushing to short.

Is the market still bullish enough to keep going? Absolutely. Funding rates are positive, and the sentiment’s holding firm — like a dog with a bone.

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2025-07-24 13:09