Data shows that a large amount of liquidations have accumulated on cryptocurrency exchanges over the past day as Bitcoin and altcoins collapse.
Bitcoin and other assets have seen downward movement in the past 24 hours
Last day was a volatile time for the cryptocurrency sector, as the US Federal Reserve revealed dovish expectations for interest rate cuts during the latest meeting of the Federal Open Market Committee (FOMC).
In response to the news, a sell-off by Bitcoin investors sent the price down below $99,000, but the crash was short-lived, as the price of the digital asset showed some quick recovery.
The trend in the price of the coin over the last five days | Source: BTCUSDT on TradingView
As can be seen in the chart above, Bitcoin is already back above $102,400, which means that the coin has fallen by less than 3% in the past 24 hours. However, altcoins have not been so lucky, as most of them are still significantly down. Ethereum, the second largest asset in this sector, saw losses of 5% in this window.
With prices collapsing market-wide, it’s no surprise that the derivatives side is going through its own chaos.
Cryptocurrency purchases have just taken a huge hit
According to data from Queen GlassThere has been a large number of liquidations in the cryptocurrency derivatives market over the past day. “Liquidation” here refers to the forced closure of any open contract after it achieves losses of a certain percentage.
Below is a table showing the relevant figures for the latest market flow:
Looks like the liquidations have heavily tended towards long contracts | Source: CoinGlass
As shown above, there were approximately $790 million in cryptocurrency-related liquidations over the past 24 hours. Of these contracts, the value of the contracts involved was $662 million, and they were long contracts, representing 84% of the total. This is of course due to the fact that the market as a whole has collapsed.
In terms of individual token contributions, Bitcoin and Ethereum are expected to come out on top again.
The breakdown of the liquidations by symbol | Source: CoinGlass
Among the rest, XRP, Dogecoin, and Solana stood out, each contributing $40 million, $29 million, and $23 million in liquidations, respectively.
A mass liquidation event, popularly called a “squeeze,” is not very uncommon for the cryptocurrency sector, given the fact that assets tend to be volatile and leveraged trading is common. However, the recent inflow volume is still notable and confirms the high speculative interest present in the market amid the uptrend.
The pressure has not deterred these traders either, as Bitcoin’s open interest continues to remain at all-time highs (ATH).
The BTC Open Interest appears to have been climbing alongside the recent price rally | Source: CoinGlass
Featured image by Dall-E, CoinGlass.com, chart from TradingView.com
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