Data shows that the cryptocurrency futures market has undergone a $152 million liquidation squeeze as bitcoin has surpassed $47,300.
crypto Futures Market Maintains Large Liquidations and Most Are Shorted
The past day has been a volatile time for the cryptocurrency sector, as coins across the space have enjoyed positive returns, with bitcoin, in particular, breaking through the $47,000 barrier with a sharp rise for the first time since the post-ETF crash.
As is often the case, this strong price action has resulted in some chaos on the futures side of the market. Below is a table of glass coin This shows how liquidations have accumulated in the futures market over the last 24 hours:
<img decoding="async" class="size-medium wp-image-280188 aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/02/Crypto-Futures-Take-a-152-Million-Beating-as-Bitcoin-Surpasses.png" alt="bitcoin Futures Settlements” width=”557″ height=”305″ data-recalc-dims=”1″/>
Looks like a relatively large amount of liquidations have occurred in the market during this period | Source: CoinGlass
In total, the cryptocurrency futures market has recorded liquidations worth almost $152 million in the last day. Of this, around $82 million has occurred in the last twelve hours alone.
As these liquidations have largely been triggered by a strong movement in asset prices, it is not too surprising to see that short positions have taken the brunt of the liquidations.
More than $115 million of this futures flow involved short positions, equal to nearly 75% of the total liquidations. Mass liquidation events like the one the previous day are popularly known as “squeezes.” Since this contraction was short and strong, it would be an example of a “short contraction.”
During a squeeze, sell-offs can cascade and, in the process, amplify the price movement that triggered them. Today's shorts have contributed to the rally, which is why bitcoin's rally has been notably steep.
As for what the contribution to the settlement event looks like by symbol, the following table shows the corresponding data.
<img loading="lazy" decoding="async" class="size-medium wp-image-280189 aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/02/1707495100_515_Crypto-Futures-Take-a-152-Million-Beating-as-Bitcoin-Surpasses.png" alt="bitcoin and others” width=”640″ height=”294″ srcset=”https://bitcoinist.com/wp-content/uploads/2024/02/data_12c4c7.png?w=789 789w, https://technicalterrence.com/wp-content/uploads/2024/02/1707495100_515_Crypto-Futures-Take-a-152-Million-Beating-as-Bitcoin-Surpasses.png 640w, https://bitcoinist.com/wp-content/uploads/2024/02/data_12c4c7.png?w=768 768w, https://bitcoinist.com/wp-content/uploads/2024/02/data_12c4c7.png?w=750 750w” sizes=”(max-width: 640px) 100vw, 640px” data-recalc-dims=”1″/>
The distribution of the liquidations by symbol | Source: CoinGlass
As expected, bitcoin topped the liquidation charts with around $54 million of contracts squeezed, while ethereum (eth) came in second with $24 million. Solana (SOL) was the altcoin with the most liquidations at $7 million.
Among the top 20 cryptocurrencies by market cap, SOL's returns of over 4% are second only to btc's 6% jump, which may be why the alt has seen significantly more liquidations than the others. sector currencies.
Historically, squeezes like the one last day have not exactly been something unusual in the sector. This is due to the high volatility that most coins in the sector experience regularly.
This is also compounded by the fact that extreme amounts of leverage (even equal to 100x the position or more) are easily accessible on many platforms, so the market can remain overleveraged overall, making it a favorable terrain for liquidations to cascade in the form of a squeeze.
Due to these factors, the cryptocurrency futures market can be risky territory for the uninformed trader.
bitcoin price
bitcoin is finally witnessing the breakout that many have been waiting for, as the coin has now surpassed the $47,300 level.
<img loading="lazy" decoding="async" class="alignnone size-medium aligncenter" src="https://www.tradingview.com/x/d09xvH5z/" alt="bitcoin price chart” width=”1534″ height=”854″/>
The price of the crypto has seen a rapid increase over the last two days | Source: BTCUSD on TradingView
Featured image from Shutterstock.com, chart from TradingView.com