Crypto Futures Liquidations Hit $150M As Bitcoin Plummets

Data shows the crypto futures market has seen liquidations of more than $150 million today as Bitcoin and other assets have observed a plummet.

Crypto Futures Liquidations In Past 24 Hours Have Reached $153 Million

The crypto market has observed some significant volatility during the past day, as many assets including Bitcoin have taken a notable hit. This volatility in spot prices has also caused chaos in the futures market, where a mass amount of liquidations has piled up.

A contract is said to be “liquidated” when the derivative platform with which said contract is open forcibly closes it due to it amassing losses of a specific percentage (which may differ from exchange to exchange).

Here is a table that shows how the market-wide liquidations have looked during the last 24 hours:

Looks like the crypto futures sector has observed a high amount of liquidations today | Source: CoinGlass

As you can see above, the total liquidations during the past 24 hours have hit $153.3 million, which is clearly a pretty significant amount. $53 million of these liquidations came within the past 12 hours, implying that the preceding half-day period was when the majority of the futures flush happened. This is naturally due to the fact that the market saw the most volatility in that 12-hour period.

Also, $135.3 million of the liquidations involved long contracts, which is almost 90% of the total liquidations. This is also not surprising, as the trigger for the liquidations was a sharp move down in the assets’ prices.

Mass liquidation events like these aren’t exactly a rare sight in the crypto sector, due to a couple of reasons. First, the market is usually quite volatile, so it’s harder to bet on where it could be heading next.

And second, extreme amounts of leverage (that is, a loan that can be taken against the position) are generally quite accessible to anyone on many exchanges. Traders may opt for these absurd degrees of leverage thinking about how much profit they would make if the bet works out, but it’s also true that failure would result in losses of equally great magnitude.

High leverage together with the general volatility of the sector is a recipe for disaster, which is what makes the crypto futures market dangerous to navigate for the uninformed trader.

In terms of the breakdown by the symbol for the futures liquidations in the past day, Bitcoin comes out on top with its $47 million wipeout, making up for about a third of the total market liquidations.

The breakdown of today's liquidations in terms of the individual symbols | Source: CoinGlass

Ethereum is in second place with less than half the liquidations of BTC, while Litecoin, Bitcoin Cash, and others follow with liquidations worth less than $5 million each.

BTC Price

At the time of writing, Bitcoin is trading around $28,500, down 3% in the last week.

The crypto has plunged during the past day | Source: BTCUSD on TradingView

Featured image from Pierre Borthiry – Peiobty on Unsplash.com, chart from TradingView.com