Crypto Liquidations Cross $1 Billion As Bitcoin Crashes To $51,000
August 05 2024 - 8:30PM
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Data shows the cryptocurrency derivatives market has suffered
liquidations of more than $1 billion in the past day as Bitcoin has
crashed to $52,000. Bitcoin Has Plunged By More Than 15% During The
Last 24 Hours Bitcoin investors have been dealt a shock to open
Monday, with the cryptocurrency having crashed by more than 15%,
which has taken its price to the $51,500 mark. Related Reading:
Dogecoin Price (DOGE) Slips Alongside Bitcoin and Ethereum: Market
Analysis The below chart shows how the recent trajectory has looked
like for the asset: From the graph, it’s visible that the latest
sharp plunge in the BTC price is just an acceleration of the trend
that the asset had already been witnessing since the last couple of
days of July. On the 29th, the cryptocurrency was floating around
the $70,000 mark, meaning that it had come down by more than 26% in
only a week. Following this drawdown, Bitcoin is now back to the
same level as that just before the late February rally, which went
on to culminate in a new price all-time high (ATH). While BTC has
had it bad during the past day, altcoins have in general had it
even worse. Ethereum (ETH), BNB (BNB), and Solana (SOL), the three
largest coins next to the original (excluding the stablecoin
Tether), have all seen higher losses of 23%, 19%, and 21%,
respectively. With prices across the sector crashing down, it’s not
surprising to see that long investors have taken a heavy blow over
on the derivatives side of the market. Crypto Liquidations Have
Crossed $1 Billion, Majority Are Long Contracts The latest
volatility in the various assets has meant the derivatives market
has gone through chaos over the past 24 hours, as the data from
CoinGlass below shows. As is visible in the table, a whopping $1.1
billion in cryptocurrency derivatives contracts have found
liquidation in this period. “Liquidation” here naturally refers to
the process any contract undergoes after amassing losses of a
certain degree, where its platform forcibly closes it up. An
extreme majority of these liquidations, around 85% to be more
precise, involved the long holders. This is a natural consequence
of the market as a whole going through a crash. Interestingly,
though, despite the sharp plummet, $173 million in shorts still
managed to get liquidated, which isn’t really a small amount. Thus,
it would appear that a large amount of investors only put their
bearish bets in when the crash was already finished. Related
Reading: Bitcoin Price Plunge Deepens: What Could Prevent a
Recovery? In terms of the individual symbols, Bitcoin and Ethereum
have contributed to the mass liquidation event by nearly the same
degrees, witnessing liquidations of $367 million and $350 million,
respectively. Clearly, BTC is still ahead, but by only a small
amount, which is not usually the case. The reason behind ETH’s high
liquidations may be the fact that the recent launch of the spot
exchange-traded funds (ETFs) had put more attention on the second
largest coin by market cap. Featured image from Dall-E,
CoinGlass.com, chart from TradingView.com
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