Record of liquidations of crypto derivatives on Ethereum futures was broken📉.

The Ethereum and Bitcoin Futures Market: A Closer Look at Liquidations

If you’ve been keeping an eye on the cryptocurrency market, you might have noticed some significant movements in the Ethereum and Bitcoin futures market leading to liquidations of leveraged positions. Let’s delve deeper into what’s been happening in the last 24 hours.

The Current State of Crypto Derivatives on Ethereum Futures

Around $350 million worth of long positions on Ethereum have been liquidated in the past day.
Compared to Bitcoin futures where less than $370 million has been liquidated, Ethereum has been more impacted proportionally.
Out of the total $908 million liquidated in the crypto market, nearly 80% involved either Ethereum or Bitcoin.
Short positions totaling $160 million have also been liquidated due to volatility.
Major exchanges like Binance and OKX have witnessed significant liquidations, totaling over $1 billion with more than 275,000 traders affected.

This data clearly indicates that Ethereum has borne the brunt of the recent market dynamics, with a higher impact than Bitcoin.

Ethereum vs. Bitcoin: A Comparison

The price ratio of Ethereum to Bitcoin has witnessed a sharp decline with one ETH dropping from 0.049 BTC to 0.042 BTC in the past 24 hours.
Bitcoin’s dominance has surged above 57% amidst the market turbulence.
While Bitcoin is facing challenges, Ethereum and other altcoins are experiencing more significant downturns, with only a few exceptions showing more resilience.

Understanding the Crypto Derivatives Market

Short-term speculation dominates the crypto derivatives market, especially leveraged positions on futures contracts.
When leveraged positions incur losses close to the invested capital, they are automatically liquidated to prevent negative balances.
Leverage amplifies gains but also heightens the risk of liquidation in volatile markets.
Chain reactions of forced liquidations can occur when prices fall below certain thresholds, leading to a self-sustaining phenomenon.

Yesterday’s market turmoil was triggered by external factors like geopolitical tensions in the Middle East and economic concerns in the USA. While short-term uncertainties persist, interventions from central banks could provide stabilization in the coming weeks.

Root Causes of the Market Turmoil

Geopolitical tensions in the Middle East, particularly Iran’s potential military actions against Israel, have sparked panic across global markets.
Economic uncertainties in the USA, including fears of a looming recession, have further contributed to market volatility.
The Federal Reserve’s potential rate cuts and intervention plans are being closely watched to gauge market responses in the near future.

While the short-term outlook remains clouded by these factors, the evolving situation demonstrates the volatility and unpredictability of the crypto market under external pressures.