Hyperliquid & BTC: $150M Long Liquidations Hit Crypto

The cryptocurrency market recently experienced a notable episode of heightened volatility, epitomized by a significant Bitcoin (BTC) price correction. On Thursday, January 8, 2026, a swift decline in Bitcoin’s value, plunging below the $90,000 threshold, initiated a widespread shakeout of leveraged long positions. This event served as a stark reminder of the market’s susceptibility to rapid price movements and the amplified risks associated with leveraged trading.

According to comprehensive data aggregated by CoinGlass, the market witnessed an approximate $145 million in long liquidations. These liquidations occurred in two distinct, rapid hourly waves, highlighting the intensity and speed of the market’s reaction. The initial wave, transpiring around 07:00 UTC, saw a substantial $88.23 million in positions cleared. This was closely followed by a second wave at 08:00 UTC, which liquidated an additional $57.02 million as Bitcoin briefly dipped beneath the $90,000 mark. Such cascading liquidations are a common feature of highly leveraged markets during periods of sharp price reversals, as traders’ collateral falls below maintenance margins, leading to automated closure of their positions.

Hyperliquid’s Significant Exposure During the Sell-Off

Among the various platforms impacted by this market downturn, Hyperliquid emerged as the most significantly affected. This rising perpetual exchange recorded an estimated $45 million in liquidations during the intense sell-off period. Furthermore, Hyperliquid was also the venue for the single largest forced order during this timeframe, amounting to nearly $3.63 million. This concentration of liquidations underscores Hyperliquid’s considerable role in the derivatives market and the pronounced impact of leverage unwinding on its platform. The fact that Hyperliquid accounted for approximately one-third of the total damage within that crucial hour demonstrates how swiftly and dramatically leverage can unravel on a single platform when market prices move unfavorably and unexpectedly.

The rapid unwinding on Hyperliquid, while significant for the platform, is symptomatic of broader market dynamics. High leverage, while offering the potential for amplified gains, equally magnifies losses, leading to forced liquidations when price movements go against open positions. This event serves as a critical case study for understanding risk management in perpetual futures trading within the decentralized finance (DeFi) ecosystem.

Macroeconomic Undercurrents: US Spot Bitcoin ETF Outflows

The pressure on Bitcoin’s price and the subsequent liquidations were not isolated events but occurred amidst a broader shift in institutional investor sentiment, particularly concerning US spot Bitcoin Exchange-Traded Funds (ETFs). Farside Investors reported substantial negative net outflows totaling $486.1 million on January 7, the day preceding the major liquidations. This significant withdrawal of capital from regulated investment vehicles indicated a cooling in institutional demand, adding downward pressure to Bitcoin’s price. The largest withdrawals were observed from prominent funds, with BlackRock’s IBIT experiencing $130 million in outflows and Fidelity’s FBTC seeing $247.6 million. These outflows suggest a potential reassessment of risk or profit-taking by large institutional players, which can have a ripple effect across the entire crypto market, influencing spot prices and, consequently, leveraged derivatives markets.

Market Sentiment and Future Outlook

The market is now closely observing whether this recent drop represents a transient shakeout, effectively cleansing excess leverage from the system, or if it signifies the commencement of a more extended cooling-off period. The softening demand from institutional ETF flows will likely play a crucial role in shaping market sentiment and Bitcoin’s price trajectory in the coming weeks. Traders and analysts are keenly analyzing on-chain data and market flow indicators to discern the underlying strength of demand versus potential for further corrective moves.

HYPE Token Analysis: A Bearish Flag in Formation?

Beyond the immediate impact on leveraged BTC positions, the market correction has also drawn attention to the performance of Hyperliquid’s native token, HYPE. Crypto analyst Ali Martinez recently shared a new chart indicating that HYPE is losing momentum on higher timeframes. Specifically, the 12-hour chart for HYPE appears to be forming what technical analysts refer to as a "bearish flag" pattern. This pattern typically emerges after a sharp price decline, such as HYPE’s fall from the $36 zone, and is characterized by a subsequent period of price consolidation within a narrow, upward-sloping channel, forming higher lows and higher highs within two parallel trendlines. This structure often suggests a temporary pause in the prevailing trend, rather than a robust recovery, indicating that while buyers are attempting to stabilize the market after significant selling pressure, they lack firm control.

Martinez’s analysis notes that HYPE recently touched the upper boundary of this flag pattern near $28 before pulling back. This retest and subsequent retreat from resistance suggest that sellers remain active at this price level, preventing a definitive breakout to the upside and pushing short-term momentum lower again. A decisive break below the lower trendline of this bearish flag would serve as a confirmation of the continuation of the earlier decline. According to Martinez, "If this flag breaks down, Hyperliquid could be heading toward the $19 zone," a price level that aligns with previous support areas. Consequently, traders are meticulously monitoring the pattern for a potential downside break, or alternatively, for buyers to mount a stronger defense and invalidate the bearish formation. The outcome will likely dictate HYPE’s short-to-medium term price action and provide further insights into the health of the Hyperliquid ecosystem.