Crypto Bulls Take a $365 Million Beating Following the Bitcoin Crash

Data shows that cryptocurrency holders have seen liquidations of $365 million in the past day as Bitcoin’s price crashed below $66,000.

The cryptocurrency derivatives market recorded high liquidations today

According to data from MintGlassthe derivatives side of the cryptocurrency market has seen some major liquidations in the past day due to the volatility that assets like Bitcoin have experienced.

The “liquidation‘ of a contract occurs when it incurs losses to some extent, causing the derivatives exchange it is open to to close it down forcibly.

Below is a table with information about the liquidation event that occurred in the cryptocurrency sector in the past day:

Crypto and Bitcoin liquidations

Looks like a large amount of liquidations have occurred during the past 24 hours | Source: CoinGlass

As visible above, the market has seen total liquidations of over $461 million in the last 24 hours. This flush involved 144,049 traders, with the largest liquidation being over $7 million.

It appears that the long investors have borne the brunt of this liquidation, with these types of contracts worth $365 million being forcibly closed. This would mean that almost 80% of the total liquidations involved these traders betting on a bullish outcome.

The price action in the sector as a whole has been negative over the past day, with Bitcoin witnessing a decline of almost 6%. It is therefore not surprising that the liquidations are dragging on for a long time.

Mass liquidation events are colloquially known as “squeezes.” Since the past day’s event was dominated by the long side of the sector, the squeeze would be categorized as a ‘long squeeze’.

During a squeeze, a sharp price change can result in a large number of liquidations that only further fuel the price movement. This amplified movement then causes even more liquidations, thus starting a cascade of liquidations.

Most of the latest flurry has occurred in the last twelve hours alone, as liquidations currently total $310 million. This again matches the price action as Bitcoin and others have been the most volatile during this period.

As for how the various individual symbols are responsible for the squeeze, the table below provides an overview:

Bitcoin liquidations

The breakdown of the liquidations according to symbol | Source: CoinGlass

Bitcoin accounted for the majority of liquidations at $137 million, while Ethereum (ETH) came in second at $100 million. Among altcoins, Solana (SOL) and Dogecoin (DOGE) top the list with around $15 million liquidations each.

In the cryptocurrency sector, mass liquidation events like today’s are not exactly an uncommon occurrence, due to the fact that the coins are generally quite volatile and many platforms offer easy access to extreme amounts of currency. lever.

Due to these factors, uninformed trading in the derivatives side of the cryptocurrency market can prove to be quite risky.

Bitcoin price

Bitcoin has fallen all the way towards the $65,200 level with its latest drawdown.

Bitcoin price chart

The price of the asset appears to have gone through some significant decline in the past day | Source: BTCUSD on TradingView

Featured image from Shutterstock.com, CoinGlass.com, chart from TradingView.com

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