BTC and the overall cryptocurrency market have been experiencing volatile behaviour in the past 24 hours. Liquidations reached a new high of $892.33 million. This massive volatility erased leveraged positions on all the exchanges, with BTC/ETH dominant in the lost stakes. The event also highlights the fact that the cryptocurrency market is highly unpredictable and acts rather as a trigger to force traders to close the majority of open positions.
BTC and ETH Dominate Liquidations
The most liquidated asset was Bitcoin, which accounted $487.13 million in positioning or about 4.97K BTC. Ethereum placed second at $85.54 million, wiped out with 22.14K ETH in liquidations. BTC and ETH are the most traded in the crypto space and, as such, are most vulnerable to any rapid price fluctuations.
This liquidation increase is aligned with the increased trading activity in these two assets, both of which have seen sizeable fluctuations over the past day. These cryptocurrencies affected traders with long and short positions as the price moved erratically, causing portfolio losses.
Heavy Losses for Altcoins
Although Bitcoin and Ethereum showed the most liquidation, many altcoins suffered significant losses. Ripple (XRP) faced liquidations of $38.20 million, affecting 16.75M XRP. Dogecoin (DOGE) was the next on the list with $22.54M in liquidations and 52.66M DOGE. Another prominent altcoin, Solana (SOL), fell victim to liquidations totaling $22.17M/94.47K SOL.
Others included Sui (SUI), $11.18M; Worldcoin (WLD), $7.74M; and Optimism (OP), $6.79M. Some of the lesser-known tokens that participated in the total liquidations included Peanut (PNUT), Cardano (ADA), Litecoin (LTC), and Wifedoge (WIF,) which showed that selling was rampant across the board.
Exchange Liquidations: OKX Leads
During this liquidation wave, OKX was most affected as it faced a total of $380.63 million in liquidation. Interestingly, OKX also facilitated the biggest single spot liquidation of $18.94M in BTC/USDT, which is why the exchange can be considered a hub of high-leverage trading.
Binance was the second most impacted exchange with $255.73M liquidations and Bybit with $140.85M. Some other exchanges impacted included Bitfinex with $59.05M, HTX (formerly Huobi) with $37.74M, CoinEx with $12.26M, and BitMEX with $5.87M.
The influence is widespread in the exchanges due to the large trading taking place and the high level of leverage, which triggers hefty losses when the prices move fast.
Short vs. Long Liquidation Trends
A close observation of the liquidation data also shows that short positions are central to most losses on the different platforms. For example, at OKX, 90.75% of liquidations were short, while at Binance and Bybit, they were 74.22% and 80.46%, respectively.
Nevertheless, long positions were not completely off the hook. In Bitfinex’s case, long position liquidations represented 33.47%, which means the market was not one-sided during the liquidation event.
Implications for Traders
This $892 million liquidation spree is a vivid example of what happens in leveraged trading. Since leverage acts as a multiplier of the account’s balance, it is equally a great risk booster; therefore, traders are advised to control their risks.
Because of the lost dominations of Bitcoin and Ethereum and the widespread effects on altcoins and exchanges, traders should act carefully. As the market of digital assets advances, it becomes even more important for a player to predict the market trends and avoid or mitigate risks that may be inherent to this type of business.
