Crypto Liquidations Exceed $1 Billion as 182,000 Traders Face Losses in a Single Day

On January 20, 2026, the cryptocurrency sector encountered a significant deleveraging event. Over 182,000 traders had their positions forcibly closed, culminating in more than $1.08 billion in liquidations. Most losses stemmed from long positions, as traders dealing in Bitcoin and Ethereum futures faced a series of margin calls.

Key Takeaways

Over 182,000 traders faced liquidation on January 20, totaling $1.08 billion.
Most losses occurred in long positions, primarily in Bitcoin and Ethereum.
The crypto market is experiencing significant technical weakness and selling pressure.
Rising Japanese bond yields are impacting global liquidity, affecting crypto investments.
Ongoing volatility in crypto markets is likely as traders navigate these challenging conditions.

Traders now face increased leverage amidst escalating global economic challenges and technical vulnerabilities across digital assets.

Record Liquidations Impact Leveraged Traders

Data from CoinGlass indicates that 182,729 traders experienced liquidations during the 24-hour period ending January 20, racking up collective losses of $1.08 billion. Nearly all of these losses came from long positions, which totaled $1.08 billion, while short liquidations were significantly less at $79.67 million.

In terms of Bitcoin, $427.06 million in long positions was liquidated, with Ethereum following closely at $374.47 million. The largest single liquidation on Bitget was a BTCUSDT_UMCBL position valued at $13.52 million. Major exchanges reported substantial losses: Hyperliquid recorded $132.39 million in long liquidations, Bybit saw $91.35 million, and Binance faced $64.08 million within just four hours.

Liquidation occurs when an exchange closes a trader's leveraged position due to insufficient margin coverage for losses. When prices fall against highly leveraged investments, exchanges automatically sell the collateral, creating a chain reaction that drives prices down further and leads to additional margin calls.

Prominent traders have suffered significantly, including Machi Big Brother, a noted investor, who faced five liquidations in one day. His total losses reached $24.18 million, and with 2,200 ETH still at risk—valued at $6.67 million—his position faces potential further downside if Ethereum drops to $2,991.43.

Signs of Technical Weakness and Market Stress

Multiple market indicators revealed clear signs of stress beyond just falling prices. Technical analysis showed that many altcoins were trading with a daily Relative Strength Index (RSI) below 50, indicating continued selling pressure. The RSI index ranges from 0 to 100, with values under 50 signaling a bearish market sentiment.

With the liquidations-to-open-interest ratio remaining high across much of the market for the past 24 hours, this points to evident deleveraging. This specific ratio, which indicates the proportion of open positions that have been liquidated, tends to rise during stressful periods of forced selling.

“Most altcoins are currently trading with a daily RSI below 50, which highlights prevailing selling pressure. Additionally, the 24-hour Liquidations/Open Interest ratio is elevated throughout the market, suggesting that numerous traders have faced liquidation recently, signifying a typical environment of deleverage and market stress.”

These repeated liquidations have drained the capital of investors, making it increasingly challenging for traders to re-enter the market at lower prices. This situation can create a self-perpetuating downward spiral, as the pool of buyers diminishes when demand is most needed to stabilize prices.

Global Liquidity Threats Heighten Market Pressure

In addition to challenges within the crypto market, macroeconomic developments are amplifying market volatility. On January 20, Japan's bond market experienced a notable shift, with 30-year Japanese Government Bond (JGB) yields soaring by 25 basis points to 3.86%, while 10-year yields increased by 8 basis points to 2.34%, both setting modern records for Japanese sovereign debt.

Sharp rise in Japanese Government Bond yields to record levels (Source: Ole S. Hansen)

This rise in yields significantly affects the broader market. Low Japanese yields have historically kept global liquidity stable, fueling the carry trade. In this scenario, investors borrow yen at low rates to invest in higher-yielding assets, including cryptocurrencies.

However, as Japanese yields climb, maintaining those positions has become increasingly expensive. Consequently, capital is flowing back into Japan and away from riskier assets like cryptocurrencies. The Bank of Japan faces limited options: controlling yields could weaken the yen, while tighter policies may distort markets or erode investor confidence. Either way, global liquidity is tightening.

The World Economic Forum in Davos adds extra pressure, where policy discussions could create further regulatory uncertainty. Historically, this annual event generates ripples across the market, especially for cryptocurrencies, which are under closer regulatory scrutiny globally.

Anticipating Continued Volatility in Crypto Markets

The combination of technical weaknesses, reduced capital from leveraged traders, and tightening global liquidity all point to ongoing uncertainty in the markets. Short-term volatility may rise as the market processes the impact of increased Japanese yields and any developments from Davos.

Traders with high levels of leverage remain vulnerable. When market conditions worsen, exchanges liquidate positions automatically to minimize risk, often resulting in significant losses for traders—commonly referred to in the crypto community as getting “rekt,” short for “wrecked.”

Effective risk management becomes essential when liquidation and stress ratios are elevated. Yet, unfavorable conditions and depleted capital may restrict buying activity, maintaining downward pressure on prices until either lower prices entice new capital or macro trends shift positively.

The coming days will reveal whether the cryptocurrency markets can withstand this turmoil or if additional waves of liquidation will occur due to changes in global financial conditions.