The Breakdown Bitcoin’s September Shakeout: $1.7B in Liquidations Sets Stage for Q4
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Sep 24, 2025 Bitcoin faced a sharp 3.5% drop, leading to $1.7B in liquidations—its biggest of the year. While traders got caught off guard, long-term holders are staying put, and sentiment remains mixed. Recent large treasury buys and fluctuating ETF flows hint at a complex market landscape. Some voices are advocating for accumulation during this dip. Additionally, there’s a push to allow crypto in 401(k) plans, potentially reshaping investment strategies. As we approach Q4, the implications of these shifts are critical.
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Leveraged Longs Were Massively Cleared
- A 3.5% drop in Bitcoin triggered $1.7 billion in long liquidations, the biggest this year.
- This flush of overleveraged positions reset market leverage and sets the stage for Q4 moves.
Low Volatility Made The Drop Risky
- Realized volatility was extremely low going into the drop, last seen similar at end of 2016.
- Low volatility plus high leverage makes sudden liquidity sweeps more likely and meaningful.
Use Dips To Accumulate, Don’t Capitulate
- View such dips as healthy resets that remove froth from the market and create accumulation opportunities.
- Avoid capitulating during these leverage-driven flushes if you hold long-term conviction.