- Bitcoin’s 4% drop triggered the largest 2025 liquidations, exposing hidden leverage risks despite stable prices near $120,000 levels.
- Long liquidations peaked at $746M in May as traders overleveraged, showing how herd behavior magnifies volatility in calm markets.
- Despite steady Bitcoin prices, recurring liquidation waves prove traders continue chasing leverage, fueling instability beneath the surface.
A sharp 4% decline in Bitcoin triggered the largest liquidation wave of 2025, according to analyst Doctor Profit. He highlighted that the real liquidity sits below current price levels, not above. The sell-off liquidated overleveraged positions and reinforced his earlier warning that “the herd is overexposed, and the herd is always wrong.”
The liquidation chart shared by Doctor Profit covers data from March 27 through September 19. Bitcoin maintained stability near $120,000 during this timeframe, yet liquidation activity soared. Hence, the market revealed a striking contrast between price stability and the volatility of leveraged positions.
Patterns Across the Months
March showed moderate liquidation activity with balanced short and long closures. However, April delivered heightened volatility, especially in the second week with sharp spikes. Moreover, May registered the most severe event, as long liquidations reached around $746 million during a surge in trading activity.
June brought steady closures of both shorts and longs, yet volumes remained higher than earlier months. July intensified this trend, with multiple large-scale liquidations well above average levels. Consequently, leverage usage expanded across the market.
August sustained the momentum with alternating waves of short and long liquidations. Traders frequently shifted positioning as volatility persisted. September, meanwhile, recorded another wave of large long liquidations. The frequency demonstrated that leverage appetite remained strong despite repeated wipeouts.
Price Stability Masks Risk
Throughout the observed period, Bitcoin’s price held within $100,000 to $140,000, forming a horizontal trading pattern. However, liquidation volumes fluctuated from minimal activity to peaks above $746 million during stress events. Additionally, Accumulation and Distribution metrics reflected steady participation, showing no retreat from speculative trading behavior.
Doctor Profit argued that his big short position continues to pay off because many traders failed to recognize liquidity traps. Moreover, he emphasized that herd mentality amplifies risks when markets appear calm, as hidden leverage builds below the surface.
