Ethereum, Cardano, and Dogecoin prices spiked, triggering a short squeeze: Binance and OKX set record single-day liquidations.
On May 9, 2025, the cryptocurrency market experienced significant volatility, with assets such as Ethereum (ETH), Dogecoin (DOGE), and Cardano (ADA) soaring, leading to short positions being liquidated exceeding $750 million. Binance and OKX exchanges saw liquidation amounts surpassing $500 million, marking the highest level since 2023. The price of ETH broke through $2,000, which is related to the upcoming Pectra upgrade. The leverage risk in the market is high, and the liquidation events reflect the market's underestimation of a price rebound.
Key Updates
05/09 08:31
Ethereum, Cardano, and Dogecoin prices spiked, triggering a short squeeze: Binance and OKX set record single-day liquidations.
On May 9, 2025, the cryptocurrency market experienced significant volatility, with assets such as Ethereum (ETH), Dogecoin (DOGE), and Cardano (ADA) soaring, leading to short positions being liquidated exceeding $750 million. Binance and OKX exchanges saw liquidation amounts surpassing $500 million, marking the highest level since 2023. The price of ETH broke through $2,000, which is related to the upcoming Pectra upgrade. The leverage risk in the market is high, and the liquidation events reflect the market's underestimation of a price rebound.
ETH Leads the Market, Price Surpasses $2,000
Ethereum has taken the lead in this market cycle, with a single-day increase of 20%, pushing the price back to the $2,000 mark for the first time since March 2023. According to CoinGlass data, ETH short liquidations amounted to $310 million, the highest among all crypto assets. This surge is believed to be related to the upcoming Pectra upgrade for Ethereum, which has prompted a reevaluation of its technical potential and application prospects, further attracting leveraged traders to place bets.
DOGE and ADA Surge in Sync, Altcoins Rebound Across the Board
In addition to ETH, other major altcoins also saw significant gains. Dogecoin (DOGE) and Cardano (ADA) each rose by more than 10%, while Solana (SOL), BNB, and XRP recorded at least a 7% increase. These gains occurred within a few hours, resulting in a large number of short positions being forcibly closed. According to CoinGlass statistics, over 84% of the liquidations came from short traders, indicating a sharp directional reversal in the market within a short period.
Binance and OKX Record All-Time High Liquidation Amounts
The hardest-hit areas of this liquidation wave were concentrated on the Binance and OKX exchanges. According to ABMedia reports, the combined liquidation amount on these two platforms exceeded $500 million, setting a record high. Among them, Bitcoin futures liquidation amounted to $375 million, indicating that even though BTC's price has surpassed $100,000, many traders continued to short, ultimately facing market backlash.
Liquidation Mechanism and Market Leverage Risk
In the cryptocurrency market, liquidations typically occur when traders cannot maintain the margin requirements for their leveraged positions. When price volatility leads to insufficient margin, exchanges automatically liquidate positions to prevent further losses. This mechanism can create a "short squeeze" effect during sharp market reversals, further pushing up prices and causing a cascade of liquidations.
The scale and speed of this liquidation event reflect a high degree of leverage usage in the market, with most traders failing to adjust their risk positions in time. According to Coinpedia reports, this is the largest single-day liquidation event since 2023, indicating a general underestimation of the market's rebound potential.
Market Sentiment and Macro Background Driving the Trend
The surge in this market trend is not driven by a single event but is the result of multiple intertwined factors. First, the recent historic trade agreement between the US and the UK, which lowers bilateral tariffs, has boosted global economic recovery expectations. Secondly, potential easing signals from the Federal Reserve and the Bank of England have heightened market expectations for future interest rate cuts, further driving up risk assets.
Additionally, Bitcoin's price surpassing the $100,000 mark has also created a strong driving effect on the overall market. According to Yahoo Finance reports, BTC has risen over 36% since its April low, with its market share climbing to 63%, indicating that funds are rapidly flowing back into the crypto market.
Surge in Trading Volume and Changes in Capital Flow
Along with the price increase, cryptocurrency trading volume has also seen significant growth. According to CoinMarketCap data, Cardano (ADA) recorded a 24-hour trading volume of $1.1 billion, growing over 70% from the previous day. DOGE also experienced large on-chain transfers, with over 800 million DOGE moved between two unknown wallets in a single day, totaling nearly $150 million, indicating that large investors (commonly known as "whales") are redeploying funds.
Implications of the Liquidation Event on Market Structure
This liquidation wave highlights the highly leveraged and sentiment-driven nature of the crypto market. When prices reverse quickly, leveraged positions amplify market volatility. Although liquidations have caused significant losses for some traders, they have also released potential risks from the market, which may help stabilize the price structure in the short term.
It is worth noting that this is not the first time a similar situation has occurred. In April 2025, ETH and DOGE also triggered approximately $500 million in short liquidations due to price rebounds, but the scale and impact of this event are more profound, suggesting that market risk appetite is rapidly increasing.
