Data shows that a large number of long cryptocurrency positions found liquidation over the past day following volatility experienced by bitcoin and others.
bitcoin price action has been a rollercoaster ride over the past 24 hours
bitcoin price has seen very strong volatility over the past day, with a low of less than $62,300 and a high of almost $65,600. The chart below shows how the coin's volatility has been playing out recently.
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The price of the crypto seems to have gone down over the last few days | Source: BTCUSD on TradingView
As seen on the chart, the drop to the low came first, leading investors to believe that btc was continuing its recent downward trajectory, but not long after, the asset bounced back to its high.
However, the number one cryptocurrency also failed to hold on to its high as it has since retreated to the $64,600 level. This means that overall, the asset ended up moving sideways over the past 24 hours.
However, the rest of the sector has not been so lucky, with many altcoins maintaining negative returns in this window. With all this volatility in asset prices, it is to be expected that the derivatives sector has gone through some chaos.
Cryptocurrency derivatives have seen large liquidations over the past day
According to data from Coin crystal As you can see, the cryptocurrency derivatives market has seen a large number of contracts liquidated over this period. In this case, “liquidation” refers to the forced closure of any contract if it accumulates losses of a certain percentage.
Below is a table showing the details related to the latest mass liquidation event in the digital asset sector:
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Looks like the liquidations have heavily tended towards the long contracts | Source: CoinGlass
In total, the cryptocurrency derivatives market has seen $256 million worth of contracts liquidated in the past 24 hours. Of these, around $193 million were long positions, accounting for more than 75% of the total.
The fact that liquidations are so uneven is, of course, due to the fact that most coins have dropped in price during this period. Even bitcoin, which has recovered, experienced a sharp drop at the beginning.
In terms of the contribution to the event by individual symbols, bitcoin and ethereum again topped the charts, with $72 million and $58 million in liquidations, respectively.
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The breakdown of the mass liquidation event by symbol | Source: CoinGlass
Solana (SOL) and XRP (XRP) appear to have attracted the most speculative interest of the rest, as they followed the top two cryptocurrencies with $18 million and $7 million in liquidations, respectively.
Mass liquidation events like this latest one are not exactly a rare occurrence in the cryptocurrency derivatives sector, due to the fact that prices can display volatility on a regular basis and extreme amounts of leverage are easily accessible on most platforms. As such, the market can be risky for the uninformed trader.
Featured image by Dall-E, CoinGlass.com, chart by TradingView.com
