Crypto Market Faces $4B Liquidation in 5 Days

Key Takeaways:

• Garrett Jin’s significant loss in leveraged ETH position.
• $4 billion liquidations affect ETH, BTC, SOL.
• Marked market impact with leverage-driven sell-offs.

Leverage trading liquidated over $4 billion in five days, affecting ETH, BTC, and SOL the most. Key player Garrett Jin faced substantial losses, signaling high market risk due to prevailing high leverage ratios.

Garrett Jin, a notable figure and Hyperunit Whale, faced a significant $250 million liquidation on a leveraged Ethereum (ETH) position on Hyperliquid on February 1, 2026.

The liquidation event underscores elevated risk levels in crypto markets, with substantial influence on long positions in major cryptocurrencies. It highlights fragility in high-leverage environments.

The liquidation cascade over five days affected assets mainly like ETH ($961 million), BTC ($679 million), and SOL ($168 million) amid high leverage and low liquidity.

Notably, the “Black Sunday II” event resulted in a major sell-off, impacting major cryptocurrency prices. Jin, recognized for aggressive trading, shifted strategies, reducing risk exposure post-loss, and sold $340 million in BTC. His actions suggest heightened caution in future trading endeavors.

Immediate effects on the cryptocurrency market included a sharp decline in ETH, BTC, and SOL prices. The Crypto Market Liquidations event marked a significant market contraction with the spot cap dropping to $2.66 trillion. Financial implications saw a high rate of liquidations impacting market sentiment and trader behavior. It led to panic selling, with short-term BTC holders capitalizing minimal gains. Technologically, leverage ratios remained elevated, bringing potential for further corrections.

Potential Regulatory Outcomes

Analyzing potential regulatory outcomes, market volatility may prompt governing bodies to address leverage risks in cryptocurrency trading. Historical parallels show similar selling pressures during large-scale liquidations, suggesting potential regulatory interest in leveraging control.