Data shows that the cryptocurrency derivatives sector has seen a large number of liquidations in the past day as bitcoin and others have enjoyed a rally.
Both long and short cryptocurrency liquidations have been high today
According to data from glass coinA significant amount of liquidations have accumulated on the derivatives side of the cryptocurrency sector due to market volatility.
“Liquidation” here refers to the forced closure that any open contract undergoes after having accumulated losses of a certain degree (the exact percentage of which may differ between platforms).
Below is a table showing data on liquidations that have occurred in the cryptocurrency sector over the last 24 hours.
<img class="wp-image-678102 size-large" src="https://technicalterrence.com/wp-content/uploads/2025/01/Crypto-Liquidations-Surpass-300-Million-as-Bitcoin-Recovers-102000.png" alt="bitcoin and Cryptocurrency Settlements” srcset=”https://www.newsbtc.com/wp-content/uploads/2025/01/table_1424cc.png?w=698 698w, https://www.newsbtc.com/wp-content/uploads/2025/01/table_1424cc.png?w=460 460w” />
As can be seen, settlements have totaled almost $306 million in this window. Of these, $154 million of the contracts involved were long positions, while $151 million were short positions.
This surprisingly even split suggests that neither side of the market was hit harder than the other, which is interesting considering the context in which bitcoin and other currencies have seen their prices rise over the past day.
It would appear that traders have been eager to place bullish positions with a large amount of associated leverage into this recovery rally, which is causing any pullbacks on the way up to catch them and add to the long liquidation counter.
In terms of contribution to the flow of derivatives through individual symbols, bitcoin once again takes first place with just under $98 million in liquidations.
<img class="wp-image-678114 size-large" src="https://technicalterrence.com/wp-content/uploads/2025/01/1737227529_488_Crypto-Liquidations-Surpass-300-Million-as-Bitcoin-Recovers-102000.png" alt="bitcoin and other cryptocurrencies” srcset=”https://www.newsbtc.com/wp-content/uploads/2025/01/details_91031a.png?w=982 982w, https://www.newsbtc.com/wp-content/uploads/2025/01/details_91031a.png?w=460 460w, https://www.newsbtc.com/wp-content/uploads/2025/01/details_91031a.png?w=768 768w, https://www.newsbtc.com/wp-content/uploads/2025/01/details_91031a.png?w=860 860w, https://www.newsbtc.com/wp-content/uploads/2025/01/details_91031a.png?w=750 750w” />
ethereum (eth) and XRP (XRP) rounded out the top three with $37 million and $25 million in liquidations, respectively. These top three are also the top three coins on the market capitalization list.
However, number four in liquidations does not match the market capitalization ranking, as it is in fact Dogecoin (DOGE) that has followed XRP with almost $16 million in contracts. The memecoin's large contribution to the squeeze could be due to the fact that its popularity means speculators are driven to it more than larger altcoins like Solana (SOL).
In other news, bitcoin open interest has recently dropped relative to market cap, as noted by analyst James Van Straten in an x. <a target="_blank" href="https://x.com/btcjvs/status/1879985236911751247″ target=”_blank”>mail.
<img src="https://technicalterrence.com/wp-content/uploads/2025/01/Crypto-Liquidations-Surpass-300-Million-as-Bitcoin-Recovers-102000.jpeg" alt="bitcoin open interest divided by market cap” />
“Open interest” refers to a measure of the total number of bitcoin-related derivatives positions that are currently open across all centralized exchanges. A large amount of speculative activity generally generates volatility for the asset, so the ratio of this metric to market capitalization should ideally remain low.
It is clear from the chart that the ratio spiked to a high of 2.8% in November, but its value has since cooled to around 2.4%, a healthier level.
bitcoin price
bitcoin's latest recovery momentum has seen a continuation over the past day as its price reached the $104,000 mark.
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