Crypto Futures Record $1B in Liquidations as Bitcoin Nosedives, Ether Slumps Most Since 2021

In cryptocurrency-tracked futures, more than $1 billion was liquidated in the last 24 hours amid a sell-off in the markets, while $304 million worth of liquidations were recorded in ether futures.

More than 200,000 traders were liquidated, and the largest liquidation order on Huobi was worth $27 million.

Bitcoin and ether prices have fallen, with ether suffering its biggest daily drop since May 2021 and the crypto fear and greed index pointing to “fear.”

Crypto-tracking futures recorded liquidations of over $1 billion in the past 24 hours as the market sell-off worsened on Sunday. The bloodbath was triggered by a stronger Japanese yen and rumors that market maker Jump Trading was liquidating its crypto business.

Futures tracking ether {{ETH}} recorded over $340 million in liquidation bets, while bitcoin futures losses reached $420 million, data shows. Futures tracking solana’s SOL, dogecoin {{DOGE}}, xrp {{XRP}} and pepe (PEPE) saw $75 million in total liquidations.

(Coin)

More than 275,000 retail investors were liquidated, with the largest single liquidation order being on crypto exchange Huobi — a BTC/USD trade worth $27 million. Data shows that around 87% of all affected investors were long-term investors or those betting on higher prices.

The liquidations came as bitcoin {{BTC}} fell more than 11% in 24 hours, while ether fell as much as 25% before recovering slightly. TradingView data shows that this was the worst single-day price drop for ETH since May 2021, when prices fell from $3,500 to $1,700. TradingView’s daily candle shows performance between 00:00 and 23:59 UTC.

The decline sent the popular crypto fear and greed sentiment index into a “fear” state, hitting its lowest level since early July. The index tracks volatility, prices and social media data to indicate whether participants are fearful (often a sign of local bottoms) or greedy (a sign of market tops).

Liquidations occur when an exchange forcibly closes an investor’s leveraged position due to a partial or full loss of the investor’s initial margin. They occur when an investor cannot meet the margin requirements for a leveraged position, i.e. does not have sufficient funds to keep the trade open.

Crypto markets began selling off last week amid geopolitical tensions in the Middle East and weak earnings reports from tech firms, factors that dampened the artificial intelligence (AI) craze among investors and caused a flight from riskier assets.

The story continues

The decline worsened early Monday morning as the yen rose to seven-month highs as expectations of more Bank of Japan rate hikes grew and carry trades ended. Tokyo’s Topix 100 index fell its most since 2011.

UPDATE (August 5, 2024): Headline and story updated with new figures.

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