LSK Liquidations Hit $41 Million After 500% Spike

Lisk (LSK) triggered $41.13 million in forced liquidations after a sharp 500% intraday surge. The price spike reversed quickly, leaving the token near its pre-spike levels.

The asset climbed above $2.00 on Sunday before falling back to approximately $0.80. This rapid round trip created the largest liquidation event in the crypto market over the last 24 hours. According to GN markets/crypto, traders on both sides of the market were forced out of their positions.

Short positions drove the liquidation volume

Coinglass data shows $33.68 million of the total liquidations came from short sellers. Long positions accounted for the remaining $7.44 million. This four-to-one split indicates forced buying rather than organic demand.

As the price rose, short sellers were required to repurchase the token to close their positions. Each repurchase order added further upward pressure on the price. Open interest reached roughly $42 million against $501 million in daily futures turnover.

Unapproved supply reduction proposal

The trading activity follows an August 25 announcement by the Lisk team. The company plans to shut down its existing blockchain on October 31. It intends to rebuild the infrastructure as a stablecoin payments service for corporate finance teams.

The proposal includes a plan to destroy 100 million LSK tokens from the treasury. This action would cut the maximum supply by 25 percent. Token holders have not yet voted on this measure.

Market volatility and historical context

Binance applied a Monitoring Tag to the listing in July. This label warns of delisting risk due to unusual volatility. The token currently trades more than 97 percent below its 2018 peak.

LSK continues to function as a loyalty token on Ethereum and Base networks. Holders on the legacy chain must bridge their assets before the deadline. The next three weeks will determine if the current price level survives the upcoming vote.