A selloff in crypto contracts tracking chip stocks began while U.S. markets were closed for the weekend, triggering the liquidation of about $52 million in positions in 10 minutes.
According to CoinGlass data, a total of $51.6 million in leveraged positions tied to chip stocks and semiconductor funds was forcibly closed between 21:22 and 21:32 UTC on Saturday, or 00:22–00:32 Sunday in Türkiye time. About $38 million of that came from long positions held by investors betting on prices to rise.
These trades are made through perpetual futures contracts that track stock prices and trade on crypto platforms seven days a week. When an investor’s collateral can no longer cover their losses, the position is automatically closed; these forced sales can also accelerate a decline.
First Major Sell Orders Appeared on Binance
According to a review of the trades by Tread.fi CEO David Jeong, the first major sell orders in SanDisk and Micron contracts appeared on Binance at 21:21:59 UTC. Less than a second later, orders also came in on Hyperliquid. About 10 addresses opened short positions in six contracts tied to chip stocks in just 1.8 seconds.
SanDisk trading volume in the first minute reached $21.9 million on Binance and $3.1 million on Trade XYZ, which offers contracts tracking stock prices on Hyperliquid.
The largest share of liquidations came from contracts tied to the SOXL fund, which triples the daily moves of chip stocks. Positions worth $12.7 million were closed in these contracts, while about $10.8 million each was liquidated in SanDisk and SK Hynix contracts. Memory chip stocks had already come through a difficult week in which competition from Chinese manufacturer CXMT was in focus.
How Did Prices Form While the Stock Market Was Closed?
The notable aspect of the selloff was that the underlying stocks were not trading at the time. Because U.S. markets were closed, no new stock prices were being formed for the contracts to track, while buying and selling on crypto platforms continued.
Trade XYZ’s rules allow trading on the platform to set a reference price until external market prices resume. As a result, weekend contract prices moved without the possibility of being compared in real time with the open stock market.
When U.S. markets reopen on Monday, prices for chip stocks can be compared with the levels reached by crypto contracts over the weekend. This will show how much the gap between the two markets widened during the selloff.
Not investment advice.