A sharp and unexpected sell-off in silver sent shockwaves well beyond traditional commodity markets, spilling directly into crypto trading venues. In a rare twist, tokenized silver futures became the most liquidated assets over the past 24 hours, overtaking both Bitcoin and Ether. The episode highlighted how crypto platforms are increasingly being used as macro trading rails, not just hubs for digital assets.
Liquidations Surge as Silver Takes the Lead
According to CoinGlass data, more than 129,000 traders were liquidated in the last 24 hours, with total losses nearing $544 million. Tokenized silver products led the damage, accounting for roughly $142 million in liquidations. This exceeded Bitcoin’s losses of around $82 million and even surpassed Ether, which saw close to $139 million in forced closures.
One of the most notable events occurred on Hyperliquid, where a single leveraged silver position worth $18.1 million was automatically liquidated as prices moved sharply against traders. The scale of the wipeout underscored how crowded and leveraged silver trades had become on crypto-native platforms.
What Sparked the Reversal?
Silver had staged a strong rally earlier this month, but momentum faded quickly. U.S. government data revealed that hedge funds and large speculators aggressively reduced their bullish exposure, cutting net-long silver positions by 36% to a 23-month low in the week ending January 27. That pullback left the market vulnerable once prices started slipping.
Selling pressure intensified further after CME Group announced it would raise margin requirements on gold and silver futures by up to 50%, effective Monday. Higher margins often force traders to post additional collateral or unwind positions entirely, accelerating declines during volatile periods.
Why Crypto Platforms Took the Hit First
Tokenized metals allow traders to gain leveraged exposure to commodities like silver without opening traditional futures accounts. These products trade around the clock and require less upfront capital, making them attractive during fast-moving macro trades. When silver reversed, the most leveraged positions on crypto venues were hit first, resulting in outsized liquidations.
Bitcoin’s relatively lower ranking in the liquidation charts stood out. While BTC prices dipped, losses remained comparatively contained. Ether followed a similar pattern, reflecting broader risk-off sentiment rather than a targeted unwind.
A Growing Macro Role for Crypto Markets
The episode reinforced a broader shift in market behavior. Crypto platforms are no longer limited to digital assets; they are increasingly used to trade commodities, currencies, and macro narratives through tokenized instruments.
Across crypto circles, sentiment turned cautious. Some X users warned that silver’s explosive rally is beginning to resemble a blow-off top rather than a sustainable supercycle. While narratives around deficits, solar demand, and geopolitical risk remain compelling, traders noted that “perfect stories” often peak when leverage and speculation dominate.
Rising solar production costs, substitution toward cheaper materials like copper, and growing inventories were flagged as early warning signs that today’s shortage narrative could quickly flip into surplus, setting the stage for sharp reversals rather than straight-line gains.
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FAQs
Heavy leverage in tokenized silver meant small price drops triggered forced closures faster than BTC or ETH, pushing silver to the top of liquidation charts.
Hedge funds cut bullish bets sharply, and higher CME margin requirements forced traders to reduce positions, accelerating the sell-off.
Yes. Tokenized assets now let traders speculate on commodities and global trends, expanding crypto’s role beyond digital-only assets.
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