Record-Breaking Potential for Crypto Liquidation Risks in September 2025: Five Key Factors
In the realm of cryptocurrency, liquidation risks are a growing concern, particularly for altcoins like Ethereum and Ripple. A recent article on BeInCrypto, titled '3 Reasons Crypto Traders Face Major Liquidation Risk This September,' highlights this issue.
According to the article, if the price of Bitcoin drops to $104,500, the potential liquidation of long positions could reach a staggering $10 billion. This risk is not insignificant, especially considering that a trader known as Ted has projected that September 2025 could see the highest liquidation volume in cryptocurrency history.
Ted's prediction is based on massive short positions in Ethereum, worth about $7.87 billion. The correlation between Ethereum and Bitcoin prices suggests that a downturn in Bitcoin's value could have a domino effect on Ethereum, leading to a surge in liquidation events.
Conversely, if the price of Bitcoin rises above $124,000, short positions will suffer losses of up to $5.5 billion. This shows that both long and short positions carry a high risk of liquidation, leaving traders in a catch-22 situation.
The volatility of altcoins, which is generally higher than that of Bitcoin, makes the effects of liquidation even more damaging. Even a slight price correction can trigger a series of large position liquidations in altcoins.
To mitigate these risks, risk management and liquidation zone mapping are essential for derivatives traders. High leveraged positions and market expectations of altcoins are the main contributors to liquidation risks.
In light of these risks, it's crucial for crypto traders to pay close attention to their risk management strategies. By understanding the potential for liquidation and taking steps to minimise losses, traders can navigate the volatile crypto market with greater confidence.
