More than 90,000 leveraged crypto traders were liquidated as $369.67 million in derivatives positions were wiped out across XRP, Ethereum, and Solana on Sept. 2. The cascade followed Brent crude climbing above $94 a barrel and the 10-year Treasury yield rising to roughly 4.8 percent, strengthening expectations that the Federal Reserve will hike rates.
Over 90,000 leveraged crypto positions were liquidated totaling $369.67 million on Sept. 2, CoinGlass data shows, as oil and Treasury yield surges fueled Fed rate hike expectations.
Fed Chairman Kevin Warsh signaled last week the central bank is uncomfortable with the current pace of inflation, remarks traders read as pointing to a rate hike this month. Brent crude climbed more than 5 percent to about $95 a barrel after fresh U.S. strikes on Iranian targets, while the 10-year Treasury yield rose to roughly 4.8 percent, its highest level since January 2025.
XRP, Ethereum, and Solana came under the heaviest selling pressure. Ethereum dropped under $2,400, while Bitcoin briefly fell below $77,000 before recovering toward $78,000. Watcher.Guru reported roughly $100 million was liquidated within 60 minutes during the sharpest leg of the decline. The S&P 500 fell 0.71 percent and the Nasdaq dropped about 1 percent as the risk-off move extended across asset classes.
The cascade shows how macro repricing now dominates crypto price action. Higher yields raise the opportunity cost of holding non-yielding assets such as Bitcoin, while a stronger inflation backdrop reduces expectations for easier monetary policy. The same forces that pressured the Nasdaq and other growth assets Tuesday are now flowing directly into crypto derivatives markets, where leveraged longs are the first to be flushed out when liquidity tightens.
Spot Bitcoin ETFs attracted roughly $217 million on Aug. 31, reversing the prior session's outflow. BlackRock's IBIT accounted for $205.9 million of the total, following a nine-session buying streak that brought about $3 billion into Bitcoin funds during August. That institutional demand helped BTC gain roughly 24 percent last month, briefly pushing it above $81,000 before momentum cooled near $78,500.
The divergence between ETF inflows and spot price weakness highlights a structural tension. While long-dated institutional buyers continue accumulating through funds, the derivatives market is repricing rapidly as macro conditions deteriorate. Higher energy costs feed directly into inflation expectations, and if the Fed responds with a hike, the opportunity cost of holding crypto rises further, potentially extending the deleveraging cycle.
Traders now watch whether the Fed follows through on a rate increase at its September meeting. If Brent stays near $95 and Treasury yields remain elevated, ETF demand may not be enough to absorb further macro shocks, leaving leveraged positions across XRP, Ethereum, and Solana vulnerable to additional forced selling.
This article is for informational purposes only and does not constitute investment advice.
