Data indicates that over $533 million in cryptocurrency long contracts have been liquidated as Bitcoin experienced a significant drop below the $63,000 level. This recent downturn comes after Bitcoin reached a new all-time high of over $73,800. In the past 24 hours, Bitcoin’s price has dropped by more than 7%, extending its overall decline. Other cryptocurrencies in the market have also experienced losses, with some even seeing double-digit drops.
Bitcoin’s Recent Downtrend and Price Performance
Bitcoin has continued its downward trend in the past day, falling to the $62,600 level for the first time in several weeks. This represents a decline of over 15% since reaching its all-time high. The chart below illustrates Bitcoin’s recent performance:
While Bitcoin’s performance has been negative, the rest of the cryptocurrency market has fared even worse, with some coins experiencing double-digit losses.
Significant Liquidations in the Crypto Derivative Market
In light of this volatility, there have been numerous liquidations in the cryptocurrency derivative market. When a contract accumulates losses to a certain degree, it is considered “liquidated,” and the platform forcibly closes it off. According to data from CoinGlass, there have been substantial liquidations in the past 24 hours:
In total, approximately $657 million worth of cryptocurrency derivative contracts have been liquidated. The majority of these liquidations involved long contracts, as the market has experienced a bearish sentiment. Specifically, long positions suffered $533 million in liquidations, while short positions faced a loss of $123 million. More than 80% of the liquidations were from traders betting on a bullish outcome for the asset.
Bitcoin and Ethereum were the most affected symbols, with $191 million and $134 million in liquidations, respectively:
Among the altcoins, Solana (SOL) and Dogecoin (DOGE) stood out with liquidations of $39 million and $14 million, respectively. These higher liquidations may be attributed to their sharper price drops compared to other altcoins.
Despite the significant liquidations, Bitcoin’s Open Interest remains at relatively high levels. Open Interest measures the total number of BTC-related contracts in the derivative market. When this metric is high, it indicates a higher likelihood of volatility in Bitcoin’s price:
As a result, the sharp price action in Bitcoin may continue until the Open Interest indicator cools off.
Hot Take: Volatility and Liquidations Shake the Crypto Market
The recent downturn in Bitcoin’s price has led to significant liquidations in the cryptocurrency derivative market. With over $533 million in long contracts being liquidated, traders who bet on a bullish outcome have suffered losses. This downturn has also affected other cryptocurrencies, with Ethereum, Solana, and Dogecoin experiencing substantial liquidations as well.
As Bitcoin’s Open Interest remains high, indicating potential volatility, it is crucial for traders to stay informed and cautious in their investment decisions. The cryptocurrency market can be highly unpredictable, and sudden price movements can result in significant losses for traders.
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