Traders woke up to a market that vacuumed liquidity, erased roughly $1.7B in leveraged positions, and forced a reset below pre-FOMC levels—yet without the capitulation you’d expect from a true trend break. Sunday-night’s thin books did the damage; now the question is whether this was a flush before the next leg, or the first crack of a tired cycle.

What just happened

A sharp weekend selloff triggered heavy long liquidations across majors. Coinglass data shows about $1.7B liquidated in 24 hours: $1.61B longs vs. $85.9M shorts. By asset: ETH ~ $493.4M, BTC ~ $283.9M, SOL ~ $95.4M, XRP ~ $78.9M. Analysts flagged the familiar Sunday-night pattern: low liquidity + stacked leverage = cascade—with dips often tested or bought into the U.S. session.

Why it matters for traders

- Weekend microstructure can magnify moves: thin order books mean small flows hit harder. - Liquidation clusters accelerate trend, then often exhaust quickly near support. - Macro tone has cooled: fading rate-cut enthusiasm and uncertain growth keep risk premia elevated.

Is the bull over—or just late-cycle?

BTC Markets’ Rachael Lucas suggests the bull run is in its final stages, with investors turning cautious. Yet on-chain behavior shows long-term holders aren’t panic-selling, pointing to nervous optimism rather than fear. Translation: momentum is slower, rotations are choppier, and leverage gets punished—but a decisive breakdown has not been confirmed.

The Sunday-night liquidity trap

This move fits a recurring pattern: weekend open interest builds, books thin out, a push through local supports triggers liquidation-driven selling. Frequently, U.S. hours provide the real signal: does spot demand absorb the dip, or does sell pressure persist with rising DXY and yields? Watch that handoff.

Macro check: what’s weighing on risk

Cooled expectations for imminent rate cuts and mixed growth data reduce appetite for high-beta crypto. Rising real yields typically pressure long-duration assets; crypto is not immune. The bias: rallies must prove themselves with spot-led demand, not just leverage.

Actionable playbook for the week

• De-lever into weekends/holidays: Assume thinner books; run smaller size and wider stops.
• Track open interest and funding: If OI rebuilds while price stalls, another squeeze is likely. Negative funding with resilient spot = potential bounce fuel.
• Use the U.S. session test: If spot bids step in and OI cleans up, consider staged re-entry; if not, avoid knife-catching.
• Map liquidation heatmaps: Fade late chases into known liq pockets; seek entries after wicks and reclaim of levels.
• Focus on spot signals: ETF/venue inflows, stablecoin net issuance, and LTH supply steadiness carry more weight than perp noise.
• Define invalidation: Pre-plan exits below fresh swing lows; keep risk per trade tight.

Levels and triggers to watch

Some analysts eye a fresh trend impulse only on a clean break and hold above key resistance (Lucas cites a BTC breakout above approximately $124,000 as a trigger for the next leg). Until then, expect range behavior, rotation, and sharp squeezes. For ETH, the large liquidation print suggests two-sided volatility; monitor whether ETH leads any rebound—or lags, signaling broader risk-off.

Bottom line

This was a leverage wash, not necessarily a cycle top. In late-stage bulls, patience, spot confirmation, and disciplined sizing beat aggression. Use liquidity windows wisely and let price prove strength before leaning long.

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