After bitcoin (BTC) fell below $40,000 in the last 24 hours, futures traders counting on a sustained recovery of crypto prices were caught in the crossfire.
According to Coinglass data, traders have lost approximately $430 million due to liquidations.
When a trader’s leveraged position is liquidated as a safety mechanism owing to a partial or entire loss of the trader’s initial margin, the exchange closes the trader’s leveraged position.
This is most common in futures trading, which solely tracks asset prices rather than spot trading, which involves traders owning the actual assets.
Longs, or traders who bet on rising prices, suffered the largest damage, accounting for roughly 90% of all losses in the last 24 hours, or $386 million. Shorts lost $44 million, which is a lot less than longs.
Bitcoin, ether futures saw the most losses. (TradingView)
Traders of bitcoin futures lost $156 million, followed by ether (ETH) futures ($102.85 million) and SOL futures ($12.41 million), which track Solana’s native currencies. After a run last week, futures Dogecoin’s DOGE and Stepn’s GMT lost a combined $16 million.
OKX, the largest crypto exchange, reported $149 million in liquidations, the most of any. Long holdings accounted for about 96 percent of the total, or $143 million. Bitmex, on the other hand, witnessed the greatest liquidated value, with a single $10 million bitcoin position being terminated on the platform.
According to CoinGecko data, bitcoin has dropped 5.2 percent in the last 24 hours. Ether fell by a comparable amount, while Solana’s SOL and Polkadot’s DOL tokens both dropped by 8%.
Monday’s losses were among the highest this year. (TradingView)
The decline in crypto markets came as recession fears grew in the United States on Monday, following the Federal Reserve’s (Fed) hawkish comments last week, which led to a global market sell-off.
Stocks and oil prices both fell on Monday. The Dow fell 1.19 percent, the S&P 500 fell 1.69 percent, and the Nasdaq, which is heavily weighted in technology, fell even more, falling 2.18 percent. On Tuesday, Asian markets dipped, with the Nikkei 225 in Japan losing 1.89 percent and Singapore and India’s Sensex both down 0.80 percent.
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