The cryptocurrency market has seen impressive bullish momentum following the long-awaited interest rate cut by the US Federal Reserve, which has led to increased liquidation.
According to data provided by Coinglass, total crypto liquidations have increased by 46% over the past day, reaching nearly $200 million. Most of the liquidated positions, worth $126 million, are short positions due to bullish moves across the market.
Bitcoin (BTC) tops the chart with $75 million liquidated after a 2.9% price surge. Bitcoin is currently trading at $62,000.
Notably, the largest single liquidation, worth $8.9 million in BTC/USD, occurred on the Bybit cryptocurrency exchange, according to Coinglass data. In total, more than 66,000 traders were liquidated in the past 24 hours.
Ethereum (ETH) came in second with over $35 million liquidated as its price crossed the $2,400 mark.
Despite the increase in liquidations, the total open interest in cryptocurrencies has increased by 4% in the last 24 hours and currently stands at around $58.7 billion.
Increased open interest is usually a sign of fear of missing out, which can lead to increased liquidation volume, leading to significant price volatility. At this point, investor sentiment has risen significantly.
The increased liquidations came after the US Federal Reserve announced a 50 basis point interest rate cut at 18:00 UTC on September 18. This was the first rate cut by the Fed since March 2020.
Later, the global cryptocurrency market cap rose by 1.9%, reaching $2.23 trillion, Data From CoinGecko. Daily trading volume has surpassed $120 billion. Moreover, the US stock market has also seen bullish momentum.