Emily Walker
Recent data indicates a significant number of liquidations occurred on cryptocurrency exchanges within the last day, following a downturn in both Bitcoin and altcoin prices.
Bitcoin and Altcoins Experience Significant Downturns
The cryptocurrency market faced considerable volatility yesterday, triggered by the US Federal Reserve’s cautious stance on interest rate cuts during the recent Federal Open Market Committee (FOMC) meeting.
In response, many Bitcoin investors sold off, driving the coin’s price below $99,000 briefly. Fortunately, it quickly bounced back.
As seen in the chart, Bitcoin has now climbed back above $102,400, reflecting a decline of less than 3% over the past 24 hours. In contrast, most altcoins are faring worse, with Ethereum, for instance, dropping by 5% during the same period.
This widespread decline across the market has also upset the derivatives sector.
Massive Liquidations Hit Crypto Long Positions
Data from CoinGlass reveals that the cryptocurrency derivatives market saw massive liquidations in the last day. A “liquidation” occurs when open contracts are forcibly closed after reaching certain loss thresholds.
The following table presents details regarding the recent market liquidation:
The data shows nearly $790 million in cryptocurrency liquidations over the past day, with long positions accounting for $662 million—about 84% of the total. This is primarily attributed to the market’s broad downturn.
Bitcoin and Ethereum were the main contributors to these liquidations.
Additionally, other assets like XRP, Dogecoin, and Solana each contributed $40 million, $29 million, and $23 million in liquidations, respectively.
Mass liquidation events, known as squeezes, are relatively common in the volatile cryptocurrency market where leveraged trading is quite popular. However, the degree of this recent event is significant, highlighting the speculative nature prevailing in the current bullish trend.
Interestingly, despite the squeeze, trader sentiment remains high, as evidenced by Bitcoin’s Open Interest reaching an all-time high (ATH).
