A sudden wave of forced selling wiped out close to $52 million in crypto traders’ leveraged positions on chip stocks on Saturday while U.S. equity markets were shut for the weekend. The liquidations occurred between 21:22 and 21:32 UTC, according to CoinGlass data, hitting contracts tied to semiconductor funds and individual chipmakers.
About $38 million of the total came from traders who had bet on higher prices, known as long positions. The most affected contract was SOXL, a fund that triples the daily moves in chip shares, which saw about $12.7 million in liquidations. Contracts tied to SanDisk and SK Hynix each lost about $10.8 million.
The cascade began on Binance, according to David Jeong, chief executive of trading firm Tread.fi, who identified the first large SanDisk and Micron sell orders on Binance at 21:21:59 UTC. Within seconds, orders hit Hyperliquid, a crypto exchange offering stock-tracking perpetual futures via its Trade XYZ product. Roughly 10 addresses opened bearish bets against six chip-linked contracts within 1.8 seconds, amplifying the downward pressure.
Binance handled about $21.9 million of SanDisk trading in that first minute, compared with $3.1 million on Trade XYZ. The contracts involved are perpetual futures, which track a stock’s price but can be traded around the clock. Because the underlying shares were not trading on Wall Street, there was no official benchmark to anchor pricing, leaving traders reacting only to each other.
The episode highlights the risks of trading stock proxies on crypto exchanges during market closures. Trade XYZ's rules allow its platform to set reference prices from its own trading until outside stock quotes resume. Those quotes will return when U.S. markets open Monday, revealing how far Saturday’s prices deviated from where the shares actually trade.