Bitcoin’s recent price drop has triggered a significant wave of long liquidations. The total amount hit $290 million during the latest market decline. In just 12 days, Bitcoin’s price fell from $66,500 to $58,900, marking an 11% drop. According to data from CryptoQuant, this price decline led to massive liquidations of long positions, which are trades betting on price increases.
$239M Long Liquidation on October 1st Lead Liquidations to $529M Total Loss in October
The largest liquidation was observed on October 1st when $239 million of longs were unwound. The situation deteriorated between October 9th and October 10th when the total long liquidations rose to $290 million. This takes the total number of liquidations to $529M in October. This is the biggest liquidation level in the crypto market since June 2022, 28 months of trading.
Long liquidation happens when the price of an asset falls and those traders who have long positions are forced to sell off their assets in order to cut their losses. This can lead to the situation when the price will be reduced even more and there will have a vicious circle. The latest ‘liquidation event’ is evidence of how unpredictable the cryptocurrency market is: any fluctuations in price can be detrimental to traders.
Bitcoin Liquidations Surge as Market Participants React to Price Fluctuations
The volatility of Bitcoin means that market participants will remain watchful for changes, reported by CryptoQuant, in price and act accordingly. The great number of these liquidations is a vivid example of the dangers of margin trading in such a highly fluctuated market.
