Crypto Shorts See Carnage As Bitcoin Surges Towards $28,000
16 Outubro 2023 - 11:00AM
NEWSBTC
Data shows the crypto futures market has observed large
liquidations in the past day as Bitcoin has recorded a sharp surge
towards $28,000. Crypto Futures Observed $78 Million In
Liquidations In Last 24 Hours A crypto futures contract is said to
be “liquidated” when the derivative exchange with which said
contract is open forcefully closes it up. This happens when the
contract has accumulated losses of a certain percentage, the exact
value of which may differ between platforms. In this sector, it’s
not too rare to see a flood of such liquidations occurring within a
short span of time. The reason behind that is the high volatility
that most of the assets display on average. A lot of investors also
like to play with extreme amounts of leverage, due to it being
readily accessible in many platforms. Leverage alone can raise the
risk of liquidation manyfold, so it combined with the high
volatility can make it easy for contracts to be flushed down.
Related Reading: Bloomberg Analyst Predicts Likelihood Of A Spot
Bitcoin ETF By January 2024 During the past day, the crypto market
has once again seen some notable volatility, which has led to
another mass liquidation event on the futures side, as the data
below from CoinGlass shows. Looks like the market has seen some
high liquidations in the past day | Source: CoinGlass As is visible
from the table, the crypto market as a whole has seen liquidations
of more than $78 million in the last 24 hours. Out of these, $61.88
million involved the short contracts, equivalent to almost 80% of
the total. This naturally makes sense, as this latest liquidation
squeeze has been led by a rally in Bitcoin’s price. The value of
the asset has shot up today | Source: BTCUSD on TradingView As
displayed above, Bitcoin has enjoyed a sharp surge in the past day.
At the peak of this rally, the coin had retested the $28,000 level
but has since seen a bit of pullback. The rest of the sector also
followed the original crypto in this rally (as is usually the
case), which is why shorts around the sector have taken a beating
today. The below table shows what the individual contribution
towards this liquidation squeeze has looked like for the different
symbols in the sector. The breakdown of the liquidations by asset |
Source: CoinGlass As expected, Bitcoin occupies the largest share
of liquidations with $31.5 million, while Ethereum is second at
$13.06 million. Interestingly, Loom Network (LOOM) is third in this
list, despite the asset being just the 71st largest in the sector
by market cap. Related Reading: Have Traders Moved Past Dogecoin?
Transactions Plunge 98% Since June The altcoin has enjoyed a sharp
rally of more than 113% in the past week, which is perhaps why the
crypto has had such strong interest behind it on the futures
market. Bitcoin Open Interest Has Rebounded Since The Squeeze As
CryptoQuant analyst Maartunn has pointed out, the Bitcoin open
interest, a measure of the total amount of contracts associated
with the asset currently open on the futures market, has jumped
back since the liquidation flush occurred. The metric has climbed
back up from its lows | Source: @JA_Maartun on X It would appear
that more speculators have jumped on the market even after seeing a
large amount of traders getting liquidated. Generally, the open
interest being high can lead to volatility, so the indicator
retracing back to its levels from before the plunge could mean BTC
would soon see more sharp price action in the near future. Featured
image from Shutterstock.com, charts from TradingView.com
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