Bitcoin Trading Frenzy Triggers Record Crypto Liquidations in December 2025
Markets convulse as leveraged positions get steamrolled
## The Domino Effect of Record Volumes
When Bitcoin's trading volume hits unprecedented levels, the collateral damage spreads fast. December 2025's price swings left over-leveraged speculators nursing seven-figure wounds—proof that even in crypto's 'mature' phase, greed still outpaces common sense.
## Liquidation Avalanche
Exchanges flashed margin calls like strobe lights as BTC's 20% intraday swings vaporized positions. The usual suspects—altcoin gamblers and 100x perpetual swap degenerates—got hit hardest. Meanwhile, traditional finance desks quietly scooped up assets at fire-sale prices (plus a 2% management fee, naturally).
## The Irony of 'Efficient' Markets
These liquidations prove crypto's self-correcting mechanism works—if by 'works' you mean transfers wealth from impatient traders to cold-storage whales. The real surprise? How quickly 'number go up' believers forget that leverage cuts both ways.
The October Bitcoin Crash
The biggest crash happened on October 10, in a reset called “Early Black Friday.” During that day, over $640 million in long positions were closed every hour as Bitcoin (BTC) dropped from $121,000 to $102,000.
Open interest, which is the total amount of money in active trades, fell 22% in less than 12 hours, going from $49.5 billion to $38.8 billion. Most of this trading comes from perpetual contracts, which now account for over 90% of futures activity.
At the same time, bitcoin spot trading has doubled compared with the last cycle. Daily spot trading is now between $8 billion and $22 billion. During the October 10 crash, hourly spot trading jumped to $7.3 billion, as buyers stepped in to buy Bitcoin at lower prices.
Bitcoin’s since ETF launch
The report also says that since U.S. spot ETFs started in early 2024, Bitcoin’s price is now decided more by the cash market, while futures trading carries more leverage.
This change has brought more money into Bitcoin, which raised its market share from 38.7% in late 2022 to 58.3% now. In addition, monthly money flowing into Bitcoin has ranged from $40 billion to $190 billion. Its total realized value is now $1.1 trillion. Glassnode said, “This highlights a more institutionally anchored and structurally mature market environment.”
Bitcoin adoption for the payment system has surged as well. In the past 90 days, the network moved $6.9 trillion, which is more than Visa or Mastercard in the same period. Institutions now hold more Bitcoin, about 6.7 million BTC in ETFs, company accounts, and treasuries. ETFs alone have taken in 1.5 million BTC since early 2024, while Bitcoin on exchanges is dropping.
This cycle started from the November 2022 market bottom and continues today. The last cycle was from the 2021 bull market to the 2022 crash.
Also Read: Bitcoin Climbs Back Above $90K Amid Regulatory Optimism
