Massive liquidations of $600 million in one hour: the crypto market under pressure from excessive leverage

The cryptocurrency market experienced a brutal purge between the night of May 17 and 18, 2026, with over $600 million in long positions liquidated in a single hour. According to CryptoBriefing data, this event occurred in a context of increased volatility and widespread use of leverage, typical of technical correction periods. The most exposed assets include high-capitalization tokens like Bitcoin (BTC), whose CryptoScore stands at 80/100, indicating structural maturity but heightened sensitivity to market movements. What Happened The massive liquidations primarily affected long positions, with a total of $600 million wiped out in one hour. These liquidations involved futures contracts and derivatives on both centralized and decentralized exchanges. On-chain data reveals that the purge was triggered by a sharp 7% drop in Bitcoin’s (BTC) price in under 30 minutes, falling from $78,000 to $72,500. Exchanges like Binance, Bybit, and dYdX each recorded liquidation volumes exceeding $100 million during this episode. Low-liquidity tokens such as SURGE, THE, or ACT saw drops of 20% to 40% in minutes, highlighting their vulnerability to volatility. Meanwhile, the Bitcoin mempool displayed 101,549 pending transactions at the peak of the purge, with average fees of 1.016 sat/vB, indicating temporary network congestion. No specific platform was identified as responsible for this event. Why This Matters Cascade liquidations are a recurring phenomenon in crypto markets, where borrowed positions (long or short) are forced to close when collateral values fall below a critical threshold. These automated mechanisms—often triggered by stop-loss or margin calls —amplify price movements through a domino effect. In this case, Bitcoin’s drop triggered massive liquidations, particularly on platforms using high leverage, reaching up to 100x on certain derivatives. Decentralized trading protocols (DEX), such as Hyperliquid (HYPE), also experienced temporary liquidity drops. Losses affected the entire market, with declines of 5% to 15% on major assets (BTC, ETH, SOL). Low-capitalization tokens were the hardest hit, with drops of 20% to 40%, while DEX volumes like HYPE and GMX fell by 30%, reflecting increased risk aversion. This event highlights the systemic risks tied to excessive leverage, a topic likely to reignite debates on crypto derivatives regulation in the U.S. and Europe. The SEC and CFTC may accelerate investigations into platforms offering leverage above 20x, as regulators seek to tighten oversight of this market segment. What to Watch The release of full data by aggregators like CoinGlass or Bybt to confirm the true scale of liquidations. Potential adjustments to liquidation thresholds by exchanges like Binance or dYdX to prevent future purges. The potential impact on crypto ETFs, particularly those from BlackRock or Fidelity, if volatility persists. Regulator responses, which could act quickly to mitigate risks or, conversely, impose stricter measures. The evolution of low-liquidity tokens, whose market sensitivity could trigger further corrections.