Over $1 Billion Liquidated In The Last 24H Due To A Strong Sell-off In BTC And ETH

Key Points:

• Cryptocurrency traders are liquidated $1 billion in the past 24 hours following long swings in BTC and ETH prices.
• The ratio of liquidated longs accounts for more than 80%.
• The market has shed blood since yesterday afternoon when continuously encountering negative signals.

According to data from Coinglass, $1.02 billion was liquidated in 24 hours after the long red candles of the two most popular cryptocurrencies in the market, Bitcoin (BTC) and Ethereum (ETH).

Liquidation occurs when an exchange closes a leveraged trading position due to a partial or complete loss of the trader’s initial funds or “margin” – if the trader does not meet the requirements margin or does not have enough funds to keep the trade open. When asset prices plunge, this dynamic can initiate a series of liquidations, exacerbating losses and lowering prices.

This liquidation has 80% (equivalent to $823.22M) of investors who predicted the price to increase have been wiped out. In it, BTC traders suffered heavy losses with $472 million in liquidation, followed by ETH with $302 million. This is considered to be one of the worst sell-offs of the year, and the BTC price dropped to a two-month low.

BTC has dropped 7% in the past 24 hours and at one point hit a low of $25,400 before recovering to the current $26,500 region. Meanwhile, ETH, the 2nd largest cryptocurrency in the market, is not much better, with a 6% drop in the past 24 hours as low as $1,500 before recovering to $1,700.

The bloodshed comes after entrepreneur Elon Musk’s space rocket company SpaceX is said to have sold some or all of the $373 million in Bitcoin it owns in 2022 and 2021. This information is extracted from SpaceX’s private financial documents collected by the WSJ.

Next is the debt bomb Evergrande, once the second most prominent real estate company in China, declared a default in 2021, sparking a real estate crisis that has lasted until now. This led Evergrande to file for bankruptcy early this morning, with total debt currently around 2.437 billion yuan ($340 billion), or 2% of China’s GDP.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.