As an analyst with over a decade of experience navigating the rollercoaster ride that is the cryptocurrency market, I’ve seen it all – from dizzying heights to crushing lows. Today’s $301 million liquidation event serves as yet another reminder of the risks inherent in this space.
In the last day, the cryptocurrency market saw a robust recovery, yet this surge wasn’t without its consequences as traders endured approximately $301 million in forced liquidations. Data from CoinGlass reveals that the abrupt market shift caused the unwinding of leveraged positions, resulting in substantial losses for traders across various platforms.
The majority of the liquidations took place within the Bitcoin and Ethereum markets. Bitcoin accounted for more than $77.40 million in liquidated trades, while Ethereum saw approximately $70 million in losses as traders grappled with the swift price rebound.
Long Traders Hit the Hardest
In most cases, the liquidations occurred due to over-leveraged situations, where traders utilized borrowed funds to increase potential profits. Although this method can lead to substantial earnings during market rallies, it leaves traders susceptible to liquidation when the market moves unfavorably. As crypto markets recovered, numerous positions fell short of meeting margin requirements, leading exchanges to terminate trades at a loss.
Based on data from CoinGlass, more than 60% of recent liquidations were long positions. This suggests that many traders anticipated prices to keep falling before the market recovery took them by surprise. Over the past day, these traders collectively incurred losses totaling approximately $180.94 million.
Conversely, short sellers suffered a substantial loss of approximately $120.22 million. The most significant forced closure happened on OKX, where an Ethereum trade valued at around $6.55 million had to be liquidated.
Most of the liquidations took place on major cryptocurrency exchange platforms, with Binance accounting for around half of the total losses. According to CoinGlass, about 133 million dollars worth of highly-leveraged trades were forcibly terminated on this particular platform.
Other significant players like Bybit, previously known as Huobi Global (now HTX), OKX, and CoinEX played crucial roles in the contribution process.
Altcoin Traders Not Spared from Market Uncertainty
Besides Bitcoin and Ethereum, a significant number of other cryptocurrencies also experienced liquidations during the wave. This included assets such as Solana (SOL) and even meme coins like Pepe Coin (PEPE), as traders found themselves unexpectedly on the losing end due to the swift price reversal.
In my exploration, it has been observed that Solana experienced approximately $10 million worth of liquidations within the past 24 hours. Notably, long-term traders bore the brunt of these events with over $6 million in losses, whereas short-term traders reported a relatively smaller setback amounting to around $4.24 million.
For those involved in trading PEPE, it’s unfortunate that they experienced approximately $7 million in liquidations, with a significant portion of the losses stemming from holding long positions.
In spite of a recent $301 million in crypto liquidations, traders remain resilient, still investing with hopes of capitalizing on market fluctuations. Yet, the volatility is unrelenting, as over $2 million was liquidated within an hour due to changing market conditions. Those who find themselves on the opposite side of a rebound are feeling the brunt of these shifting tides.
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2024-10-16 11:58