Data indicates that the cryptocurrency derivatives market has suffered a lot of liquidations as Bitcoin witnessed volatility in the past day.
Bitcoin has gone through a period of volatility over the past 24 hours
Bitcoin has seen some wild price movements over the past day, not only recording a new all-time high (ATH) near the $90,000 mark, but also recording a low around the $85,000 mark.
The chart below shows what the recent trajectory of the asset has been like.
The price of the coin appears to have been rising recently | Source: BTCUSDT on TradingView
The chart shows that since the low of $85,000, BTC has already rebounded to $88,500, meaning its price has almost come back from the decline.
Given that most coins in the sector react closely to movements in the value of the original cryptocurrency, their prices have also experienced similar fluctuations.
The result of all this extreme action was chaos on the derivatives side of the market, as speculators rushed to predict where assets would go next, only for a large portion of them to end up failing.
Nearly $1 billion worth of cryptocurrencies have just been liquidated
According to data from Queen Glassfound several contracts liquidating over the past day. The word “liquidation” refers to the process that an open contract goes through after accumulating losses to a certain degree, whereby its platform forcibly closes it.
Below is a table displaying the numbers related to the recent mass liquidation event in the sector:
Looks like the liquidations have heavily tended towards longs during this window | Source: CoinGlass
The cryptocurrency derivatives market appears to have witnessed liquidations worth $973 million in the past 24 hours, of which $580 million were in long trades and the remaining $393 million in short trades.
Interestingly, although prices saw a net increase for many assets within this window, more investors betting on a bullish outcome were able to unload these assets.
This may of course indicate that many traders rushed to take their bullish positions only after the price of Bitcoin rose to its highest level recently. Although the longs have been bad, the shorts have certainly not been flattened, as their numbers are large in their own right.
In terms of contributing to individual token liquidations, Bitcoin is expected to come out on top with contracts worth over $270 million participating in the event.
The distribution of the liquidations across the various symbols | Source: CoinGlass
However, it is worth noting that Dogecoin (DOGE) managed to see more liquidations than Ethereum (ETH), even though the latter has the second largest market capitalization in this sector. However, the difference between the two hardly exceeds half a million dollars.
DOGE’s high liquidations are likely a product of the explosive move its price has seen, as it moved to end the day up over 21%.
Featured image by Dall-E, CoinGlass.com, chart from TradingView.com