Volatility in the cryptocurrency market has triggered liquidations surpassing $400 million in the past 24 hours. Bitcoin positions alone accounted for $130 million in liquidations, predominantly affecting long positions.
The recent volatility in the crypto market led to a surge in liquidations on centralized exchanges, coinciding with Bitcoin’s decline below the $67,000 mark, followed by a broader downturn across the crypto space.
According to data from CoinGlass, liquidations totaling over $427 million were recorded across various centralized crypto exchanges in the past day, with the majority, approximately $342 million, stemming from long positions.
Bitcoin bore the brunt of the liquidations, with over $130 million in liquidations within the same period, of which $90 million represented long positions.
Liquidations occur when a trader’s position is forcibly closed due to insufficient funds to cover losses, typically resulting from adverse market movements depleting initial margin or collateral.
The cascade of liquidations coincided with Bitcoin’s drop below $67,000, having traded above $71,000 the previous day. The largest cryptocurrency by market capitalization has seen a decrease of over 4.2% in the last 24 hours, currently hovering around $66,500.
Meanwhile, the GMCI 30 index, reflecting the top 30 cryptocurrencies, experienced a 6.8% decline to 143.40 over the past day, with the second-largest cryptocurrency, ether, plunging by 6.5% to $3,319.
Following the market downturn, analysts at crypto trading firm QCP Capital highlighted signals from the options market, indicating the liquidation spree led by large retail-heavy exchanges.
QCP analysts noted, “Once again, the options market provided an early signal to a sharp downside move, particularly the downside skew in risk reversals.” They further emphasized the rapidity of the downturn, attributing it to significant liquidations on retail-heavy platforms like Binance, resulting in flat perp funding rates after reaching as high as 77%.
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