Emily Walker
Recent data indicates that the cryptocurrency derivatives market experienced a significant liquidation event as Bitcoin and other cryptocurrencies fell sharply.
Mass Liquidation in the Crypto Market
Data from CoinGlass reveals a substantial number of contracts were liquidated over the last 24 hours. A position is considered “liquidated” when the trading platform forcibly closes it due to excessive losses incurred by the holder.
Two key factors contribute to the risk of liquidation. First, volatility plays a major role; a highly volatile asset like cryptocurrency can swing dramatically, making it difficult to predict price direction.
The second factor is leverage, which allows investors to borrow against their initial collateral. While leverage can amplify profits, it can similarly increase losses, heightening the likelihood of liquidation.
In the cryptocurrency landscape, these factors are frequently in play, causing significant price fluctuations and attracting high-risk speculators.
This combination often leads to mass liquidation events, commonly referred to as squeezes, and one such incident has occurred in the past day, as illustrated in the table below.
During this liquidation event, the total amount reached an astonishing $904 million, with nearly $811 million—accounting for about 90%—originating from long contract holders.
The heavy liquidation of long positions correlates with the sharp decline in prices for Bitcoin and other cryptocurrencies during the same timeframe.
Below is a heatmap illustrating the liquidations categorized by cryptocurrency:
The data shows that Bitcoin was responsible for the bulk of the liquidations at $261 million, followed by Ethereum (ETH) at $113 million and Solana (SOL) at $39 million.
Despite having a larger market cap, XRP was less affected in terms of liquidation value, likely due to a smaller price downturn relative to SOL.
Interestingly, despite the long squeeze, exchanges have not shown a significant inclination towards long positions recently, as highlighted by analytics firm Glassnode in a post on X here.
Glassnode observes, “The hourly funding rates for the top 5 assets ( $BTC, $ETH, $SOL, $XRP, $DOGE) indicate that the interest in long positions has not rebounded to the levels witnessed during the rally from November to early December.”
Current Bitcoin Price
Currently, Bitcoin is trading at approximately $100,400, reflecting a decline of over 4% in the past week.