Crypto Market Sees $223M in Liquidations on Christmas Day

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As a seasoned researcher with years of experience navigating the complex world of cryptocurrencies and their markets, I can attest to the rollercoaster ride that is the crypto space – even during seemingly quiet periods like Christmas! The $223 million in liquidations on December 25 underscored this point, with long Ethereum traders bearing the brunt of the market’s turbulence.

As people around the globe reveled in Christmas cheer, crypto traders found themselves grappling with a more challenging scenario within the unpredictable futures market. On December 25th, the market saw an astounding $223 million worth of liquidations, emphasizing the ongoing dangers and turbulence that persist, even during festive holidays.

During the winding-down phase, it was disclosed by CoinGlass that most of the losses were incurred by long traders, equivalent to approximately $153.68 million in cryptocurrencies being removed from centralized exchanges. Conversely, short traders experienced relatively small losses totaling around $69 million.

Ethereum Traders Bear the Market Brunt

The liquidation events impacted significant cryptocurrencies such as Bitcoin ($95,742), Ethereum ($3,361), and Solana ($188.9). Here are their key stats for the last 24 hours:

Bitcoin saw around $36 million worth of positions being forcibly closed as traders underestimated market fluctuations, leading to substantial liquidations. Similarly, altcoins such as SOL witnessed notable activity, resulting in about $5 million in liquidations. In sum, these digital currencies triggered the termination of approximately $40 million in open leveraged positions collectively.

The data highlights the persistent volatility in the crypto market, even during what is traditionally seen as a quieter trading period.

In the meantime, the high number of sell-offs suggests a continuous battle between optimistic and pessimistic views. Analysts propose that the current rebound signals hidden market resilience, as traders and investors rebalance their holdings in preparation for the upcoming year.

Market Sentiment and Recovery Signals

In spite of numerous sell-offs, the cryptocurrency market exhibited indications of revival. Bitcoin, which had dropped below $95,000 earlier in the week, bounced back to hover near $98,337. Likewise, Ethereum found its footing above the $3,400 threshold following a series of volatile price changes over the course of the week.

At present, the overall cryptocurrency market boasts a worth of approximately $3.41 trillion. Notably, Bitcoin accounts for over half of this total, maintaining a dominant share of about 57.16%.

On Christmas Day, it wasn’t just the crypto derivatives market that encountered difficulties. Throughout the week, events had been causing unease among institutional investors, leading them to withdraw about 338.38 million dollars from Bitcoin spot exchange-traded funds (ETFs) on a single Wednesday.

According to SoSoValue’s data, investment funds faced another day with substantial withdrawals. BlackRock’s IBIT and Fidelity Investments’ FBTC led the way in these outflows. Specifically, BlackRock’s IBIT had outflows worth $188 million, and Fidelity’s FBTC recorded withdrawals amounting to $83 million on this day.

Similarly to other Bitcoin ETFs like ARK 21Shares Bitcoin ETF (ARKB), there were significant withdrawals, with investors removing approximately $75 million from the fund. However, Bitwise Bitcoin ETF (BITB) broke the trend, being the sole ETF among the 11 U.S.-traded Bitcoin ETFs that experienced inflows. As reported by SoSoValue, on Christmas Day alone, investors bought over $8 million worth of BITB, providing a rare optimistic signal amidst a generally difficult time for Bitcoin ETFs.

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2024-12-26 12:07