- $659 million in futures contracts liquidated in 24 hours.
- Long positions hit hardest, losing $568 million.
- Bitcoin, Ethereum, and Solana major contributors to the liquidation event.
In the throes of a volatile 24 hours for the cryptocurrency market, the futures sector has experienced a significant liquidation event, resulting in a staggering loss of approximately $659 million. The upheaval was triggered by a sharp decline in the price of Bitcoin, which plummeted to as low as $41,500.
Data from CoinGlass reveals that over the last day, nearly $660 million worth of futures contracts succumbed to liquidation, a process activated when losses reach a predetermined percentage of the position, leading to forced closure by the exchange.
Long positions bore the brunt of this mass liquidation, with contracts valued at around $568 million obliterated, constituting a substantial 86% of the total liquidations within the past 24 hours. The forceful closures were exacerbated by a pronounced drawdown following Bitcoin’s sudden crash.
Notably, a significant portion of the total liquidations, approximately $613 million, occurred in the last twelve hours, aligning with heightened market volatility during that period.
Analyzing the contribution of different cryptocurrencies to the liquidation event, Bitcoin-related contracts claimed the lion’s share at about $148 million. Ethereum (ETH) and Solana (SOL) emerged as the next significant contributors, with approximately $111 million and $34 million in liquidations, respectively.
While mass liquidation events are not uncommon in the cryptocurrency sector due to the inherent volatility of most coins and the prevalence of high leverage, this event underscores the risks associated with trading in the crypto futures market.
Bitcoin futures, in particular, have seen heightened interest in recent times, as highlighted by CryptoQuant Netherlands community manager Maartunn. The graph indicates that Bitcoin futures volume has consistently outpaced spot volume, with a widening gap in the latter half of 2023. Despite a slight decline in the indicator towards the end of the year, recent values remain elevated compared to historical norms, pointing to sustained interest in cryptocurrency derivatives.
As market participants grapple with the aftermath of this significant liquidation event, it serves as a stark reminder of the volatile nature of the cryptocurrency market and the potential risks associated with leveraged trading.
Disclaimer: Please note that the viewpoints and perspectives expressed by the author, as well as any individuals referenced in this article, are intended solely for informational purposes. They should not be construed as financial or investment advice. It’s important to acknowledge that investing in or trading cryptoassets carries inherent financial risks.