Crypto Rebound Liquidates Nearly $500M in Shorts as Mutuum Finance Surpasses $20.6M Raised

Crypto Rebound Triggers $500M in Short Liquidations

The cryptocurrency market rebounded over the past 24 hours, driving broad gains across large-cap assets and triggering nearly $500 million in short liquidations. As derivatives positions were unwound amid rising prices, total Crypto Rebound market capitalization climbed more than 4%. At the same time, decentralized finance project Mutuum Finance reported that it has raised over $20.6 million to date, reflecting continued capital formation in selected segments of the market.

Short Sellers Absorb Majority of Liquidations

Total crypto market capitalization increased by 4.29% over the past day, with most of the top 10 cryptocurrencies trading in positive territory. Dogecoin led gains among large-cap assets with a 9.10% increase, followed by Lido Staked Ether at 8.83%. Ethereum rose 8.75%, reclaiming the $2,000 level, while Bitcoin advanced 4.76%, briefly touching $70,000 before retracing to trade near $68,000.

The upward move triggered widespread liquidations across derivatives markets. According to Coinglass data, 128,348 traders were liquidated within 24 hours, totaling approximately $575.6 million. Of that amount, $468.5 million came from short positions, compared to $107 million in long liquidations. Bitcoin accounted for nearly 40% of total liquidations, with about $194.9 million in short positions wiped out, while Ethereum recorded $203.8 million in total liquidations, the majority stemming from short exposure.

Despite the rally, analysts cautioned that the move may reflect short covering rather than renewed structural demand. Research from XWIN Research Japan noted that open interest has declined from prior highs, indicating deleveraging rather than aggressive spot accumulation. Fund flow metrics also suggest limited immediate sell pressure but do not yet point to strong inflows. Analysts added that sustained recovery would likely require a pickup in spot trading volumes rather than reliance on derivatives-driven squeezes alone.

Mutuum Finance

With more than 19,000 holders of its native MUTM token, which is trading at $0.04, Mutuum Finance has reported raising more than $20.6 million to date. The project states that as part of the ongoing fundraising phase, over 850 million tokens have been distributed.

Based on the Ethereum network, Mutuum Finance is a decentralized lending and borrowing system. It enables users to borrow against their holdings without having to sell them or supply cryptocurrency assets into liquidity pools in order to receive yield. Users receive mtTokens as evidence of deposit on a 1:1 ratio when they deposit assets. Based on utilization rates, these mtTokens accrue yield and represent the user's portion of the pool.

For instance, a user with $2,000 in ETH who doesn't want to sell can borrow stablecoins like USDT and deposit the ETH as collateral. The customer could borrow up to $1,500 while keeping a collateral buffer if the maximum loan-to-value (LTV) ratio is 75%. On the lending side, depending on borrowing demand and pool utilization, a user who contributes $5,000 in USDT to a liquidity pool will receive yield. Depending on market circumstances and utilization levels, the position might eventually grow to about $5,500, assuming an average yearly return of about 10%.

Before the anticipated mainnet launch, users can test the V1 protocol's fundamental features on the Sepolia testnet, which is now operational. ETH, USDT, WBTC, and LINK are among the testnet assets that are supported. According to the team, testnet total value locked (TVL), which reflects user engagement in the beta environment, has topped $150 million in simulated liquidity.

Prior to the testnet release, Halborn performed a security audit on the lending and borrowing smart contracts. All mentioned findings were addressed, according to the project. The MUTM token smart contract was also reviewed by CertiK, receiving a Token Scan score of 90 out of 100.

The roadmap looks ahead, outlining more feature releases, ongoing protocol optimization, and wider ecosystem growth. The whitepaper cites future intentions for multichain integration and the creation of an overcollateralized stablecoin that will function inside the lending framework of the protocol.

Overall, the recent market rebound underscores the role of derivatives positioning in short-term price movements, while structural demand remains under evaluation. At the same time, projects such as Mutuum Finance continue to report fundraising progress and protocol development ahead of mainnet deployment. How broader market conditions and user participation evolve in the coming months will likely shape both price trends and activity across centralized and decentralized segments of the crypto market.